Correlation Between Rico Auto and Oriental Hotels
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By analyzing existing cross correlation between Rico Auto Industries and Oriental Hotels Limited, you can compare the effects of market volatilities on Rico Auto and Oriental Hotels 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 Rico Auto with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rico Auto and Oriental Hotels.
Diversification Opportunities for Rico Auto and Oriental Hotels
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rico and Oriental is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rico Auto Industries and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Hotels and Rico Auto 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 Rico Auto Industries are associated (or correlated) with Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of Rico Auto i.e., Rico Auto and Oriental Hotels go up and down completely randomly.
Pair Corralation between Rico Auto and Oriental Hotels
Assuming the 90 days trading horizon Rico Auto Industries is expected to under-perform the Oriental Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Rico Auto Industries is 1.27 times less risky than Oriental Hotels. The stock trades about -0.15 of its potential returns per unit of risk. The Oriental Hotels Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 16,331 in Oriental Hotels Limited on August 25, 2024 and sell it today you would earn a total of 2,449 from holding Oriental Hotels Limited or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rico Auto Industries vs. Oriental Hotels Limited
Performance |
| Timeline |
| Rico Auto Industries |
| Oriental Hotels |
Rico Auto and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rico Auto and Oriental Hotels
The main advantage of trading using opposite Rico Auto and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rico Auto position performs unexpectedly, Oriental Hotels 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.| Rico Auto vs. Keynote Financial Services | Rico Auto vs. Osia Hyper Retail | Rico Auto vs. Geojit Financial Services | Rico Auto vs. Tamilnad Mercantile Bank |
| Oriental Hotels vs. MMTC Limited | Oriental Hotels vs. Kingfa Science Technology | Oriental Hotels vs. Rico Auto Industries | Oriental Hotels vs. GACM Technologies Limited |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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