Correlation Between Royal Orchid and Asian Hotels
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By analyzing existing cross correlation between Royal Orchid Hotels and Asian Hotels Limited, you can compare the effects of market volatilities on Royal Orchid and Asian 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 Royal Orchid with a short position of Asian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Orchid and Asian Hotels.
Diversification Opportunities for Royal Orchid and Asian Hotels
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and Asian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Royal Orchid Hotels and Asian Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Hotels Limited and Royal Orchid 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 Royal Orchid Hotels are associated (or correlated) with Asian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Hotels Limited has no effect on the direction of Royal Orchid i.e., Royal Orchid and Asian Hotels go up and down completely randomly.
Pair Corralation between Royal Orchid and Asian Hotels
Assuming the 90 days trading horizon Royal Orchid Hotels is expected to under-perform the Asian Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Royal Orchid Hotels is 1.49 times less risky than Asian Hotels. The stock trades about -0.03 of its potential returns per unit of risk. The Asian Hotels Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 18,073 in Asian Hotels Limited on November 2, 2024 and sell it today you would earn a total of 16,157 from holding Asian Hotels Limited or generate 89.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Orchid Hotels vs. Asian Hotels Limited
Performance |
| Timeline |
| Royal Orchid Hotels |
| Asian Hotels Limited |
Royal Orchid and Asian Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Orchid and Asian Hotels
The main advantage of trading using opposite Royal Orchid and Asian Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Orchid position performs unexpectedly, Asian 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 Asian Hotels will offset losses from the drop in Asian Hotels' long position.| Royal Orchid vs. Bikaji Foods International | Royal Orchid vs. Hindustan Construction | Royal Orchid vs. Bigbloc Construction Limited | Royal Orchid vs. Kaynes Technology India |
| Asian Hotels vs. Navneet Education Limited | Asian Hotels vs. Mtar Technologies Limited | Asian Hotels vs. AVALON TECHNOLOGIES LTD | Asian Hotels vs. PNC Infratech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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