Correlation Between Oriental Hotels and Rainbow Childrens
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By analyzing existing cross correlation between Oriental Hotels Limited and Rainbow Childrens Medicare, you can compare the effects of market volatilities on Oriental Hotels and Rainbow Childrens 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 Rainbow Childrens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Hotels and Rainbow Childrens.
Diversification Opportunities for Oriental Hotels and Rainbow Childrens
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oriental and Rainbow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Hotels Limited and Rainbow Childrens Medicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainbow Childrens 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 Rainbow Childrens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainbow Childrens has no effect on the direction of Oriental Hotels i.e., Oriental Hotels and Rainbow Childrens go up and down completely randomly.
Pair Corralation between Oriental Hotels and Rainbow Childrens
Assuming the 90 days trading horizon Oriental Hotels Limited is expected to generate 1.21 times more return on investment than Rainbow Childrens. However, Oriental Hotels is 1.21 times more volatile than Rainbow Childrens Medicare. It trades about 0.08 of its potential returns per unit of risk. Rainbow Childrens Medicare is currently generating about 0.08 per unit of risk. If you would invest 8,011 in Oriental Hotels Limited on September 5, 2024 and sell it today you would earn a total of 10,538 from holding Oriental Hotels Limited or generate 131.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oriental Hotels Limited vs. Rainbow Childrens Medicare
Performance |
| Timeline |
| Oriental Hotels |
| Rainbow Childrens |
Oriental Hotels and Rainbow Childrens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Hotels and Rainbow Childrens
The main advantage of trading using opposite Oriental Hotels and Rainbow Childrens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Hotels position performs unexpectedly, Rainbow Childrens 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 Rainbow Childrens will offset losses from the drop in Rainbow Childrens' long position.| Oriental Hotels vs. Reliance Industries Limited | Oriental Hotels vs. State Bank of | Oriental Hotels vs. HDFC Bank Limited | Oriental Hotels vs. Oil Natural Gas |
| Rainbow Childrens vs. Reliance Industries Limited | Rainbow Childrens vs. Life Insurance | Rainbow Childrens vs. Indian Oil | Rainbow Childrens vs. Oil Natural Gas |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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