Correlation Between Refex Industries and Royal Orchid
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By analyzing existing cross correlation between Refex Industries Limited and Royal Orchid Hotels, you can compare the effects of market volatilities on Refex Industries 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 Refex Industries with a short position of Royal Orchid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refex Industries and Royal Orchid.
Diversification Opportunities for Refex Industries and Royal Orchid
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Refex and Royal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Refex Industries 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 Refex Industries 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 Refex Industries 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 Refex Industries i.e., Refex Industries and Royal Orchid go up and down completely randomly.
Pair Corralation between Refex Industries and Royal Orchid
Assuming the 90 days trading horizon Refex Industries Limited is expected to generate 1.33 times more return on investment than Royal Orchid. However, Refex Industries is 1.33 times more volatile than Royal Orchid Hotels. It trades about 0.14 of its potential returns per unit of risk. Royal Orchid Hotels is currently generating about 0.04 per unit of risk. If you would invest 5,212 in Refex Industries Limited on October 13, 2024 and sell it today you would earn a total of 43,083 from holding Refex Industries Limited or generate 826.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Refex Industries Limited vs. Royal Orchid Hotels
Performance |
| Timeline |
| Refex Industries |
| Royal Orchid Hotels |
Refex Industries and Royal Orchid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refex Industries and Royal Orchid
The main advantage of trading using opposite Refex Industries and Royal Orchid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refex Industries 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.| Refex Industries vs. Digjam Limited | Refex Industries vs. Gujarat Raffia Industries | Refex Industries vs. E2E Networks Limited | Refex Industries vs. Datamatics Global Services |
| Royal Orchid vs. Consolidated Construction Consortium | Royal Orchid vs. Biofil Chemicals Pharmaceuticals | Royal Orchid vs. Refex Industries Limited | Royal Orchid vs. Kingfa Science Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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