Correlation Between Oriental Hotels and SAL Steel
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By analyzing existing cross correlation between Oriental Hotels Limited and SAL Steel Limited, you can compare the effects of market volatilities on Oriental Hotels and SAL Steel 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 SAL Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Hotels and SAL Steel.
Diversification Opportunities for Oriental Hotels and SAL Steel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oriental and SAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Hotels Limited and SAL Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAL Steel 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 SAL Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAL Steel Limited has no effect on the direction of Oriental Hotels i.e., Oriental Hotels and SAL Steel go up and down completely randomly.
Pair Corralation between Oriental Hotels and SAL Steel
Assuming the 90 days trading horizon Oriental Hotels Limited is expected to under-perform the SAL Steel. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Hotels Limited is 1.56 times less risky than SAL Steel. The stock trades about -0.31 of its potential returns per unit of risk. The SAL Steel Limited is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,299 in SAL Steel Limited on November 8, 2024 and sell it today you would lose (242.00) from holding SAL Steel Limited or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Hotels Limited vs. SAL Steel Limited
Performance |
| Timeline |
| Oriental Hotels |
| SAL Steel Limited |
Oriental Hotels and SAL Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Hotels and SAL Steel
The main advantage of trading using opposite Oriental Hotels and SAL Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Hotels position performs unexpectedly, SAL Steel 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 SAL Steel will offset losses from the drop in SAL Steel's long position.| Oriental Hotels vs. Coffee Day Enterprises | Oriental Hotels vs. Hindustan Construction | Oriental Hotels vs. Associated Alcohols Breweries | Oriental Hotels vs. Consolidated Construction Consortium |
| SAL Steel vs. Hathway Cable Datacom | SAL Steel vs. Lemon Tree Hotels | SAL Steel vs. Ravi Kumar Distilleries | SAL Steel vs. Advani Hotels Resorts |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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