Correlation Between Oriental Hotels and HDFC Bank
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By analyzing existing cross correlation between Oriental Hotels Limited and HDFC Bank Limited, you can compare the effects of market volatilities on Oriental Hotels and HDFC Bank 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 Oriental Hotels with a short position of HDFC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Hotels and HDFC Bank.
Diversification Opportunities for Oriental Hotels and HDFC Bank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oriental and HDFC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Hotels Limited and HDFC Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDFC Bank Limited and Oriental Hotels 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 Oriental Hotels Limited are associated (or correlated) with HDFC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDFC Bank Limited has no effect on the direction of Oriental Hotels i.e., Oriental Hotels and HDFC Bank go up and down completely randomly.
Pair Corralation between Oriental Hotels and HDFC Bank
Assuming the 90 days trading horizon Oriental Hotels Limited is expected to generate 2.48 times more return on investment than HDFC Bank. However, Oriental Hotels is 2.48 times more volatile than HDFC Bank Limited. It trades about -0.18 of its potential returns per unit of risk. HDFC Bank Limited is currently generating about -0.53 per unit of risk. If you would invest 18,801 in Oriental Hotels Limited on October 13, 2024 and sell it today you would lose (1,910) from holding Oriental Hotels Limited or give up 10.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oriental Hotels Limited vs. HDFC Bank Limited
Performance |
| Timeline |
| Oriental Hotels |
| HDFC Bank Limited |
Oriental Hotels and HDFC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Hotels and HDFC Bank
The main advantage of trading using opposite Oriental Hotels and HDFC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Hotels position performs unexpectedly, HDFC Bank 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 HDFC Bank will offset losses from the drop in HDFC Bank's long position.| Oriental Hotels vs. WESTLIFE FOODWORLD LIMITED | Oriental Hotels vs. Vinati Organics Limited | Oriental Hotels vs. Megastar Foods Limited | Oriental Hotels vs. 21st Century Management |
| HDFC Bank vs. Kalyani Steels Limited | HDFC Bank vs. Oriental Hotels Limited | HDFC Bank vs. Jindal Steel Power | HDFC Bank vs. Lemon Tree Hotels |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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