Correlation Between NIIT and Royal Orchid
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By analyzing existing cross correlation between NIIT Limited and Royal Orchid Hotels, you can compare the effects of market volatilities on NIIT and Royal Orchid and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NIIT with a short position of Royal Orchid. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIIT and Royal Orchid.
Diversification Opportunities for NIIT and Royal Orchid
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIIT and Royal is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NIIT Limited and Royal Orchid Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Orchid Hotels and NIIT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NIIT Limited are associated (or correlated) with Royal Orchid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Orchid Hotels has no effect on the direction of NIIT i.e., NIIT and Royal Orchid go up and down completely randomly.
Pair Corralation between NIIT and Royal Orchid
Assuming the 90 days trading horizon NIIT is expected to generate 1.05 times less return on investment than Royal Orchid. In addition to that, NIIT is 1.73 times more volatile than Royal Orchid Hotels. It trades about 0.02 of its total potential returns per unit of risk. Royal Orchid Hotels is currently generating about 0.04 per unit of volatility. If you would invest 25,090 in Royal Orchid Hotels on September 19, 2024 and sell it today you would earn a total of 11,130 from holding Royal Orchid Hotels or generate 44.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
NIIT Limited vs. Royal Orchid Hotels
Performance |
| Timeline |
| NIIT Limited |
| Royal Orchid Hotels |
NIIT and Royal Orchid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIIT and Royal Orchid
The main advantage of trading using opposite NIIT and Royal Orchid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIIT position performs unexpectedly, Royal Orchid can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Royal Orchid will offset losses from the drop in Royal Orchid's long position.| NIIT vs. Royal Orchid Hotels | NIIT vs. LT Technology Services | NIIT vs. The Indian Hotels | NIIT vs. Chalet Hotels Limited |
| Royal Orchid vs. Sri Havisha Hospitality | Royal Orchid vs. GPT Healthcare | Royal Orchid vs. Akme Fintrade India | Royal Orchid vs. Bharat Road Network |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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