Correlation Between Royal Orchid and Great Eastern
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By analyzing existing cross correlation between Royal Orchid Hotels and The Great Eastern, you can compare the effects of market volatilities on Royal Orchid and Great Eastern 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 Great Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Orchid and Great Eastern.
Diversification Opportunities for Royal Orchid and Great Eastern
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and Great is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Royal Orchid Hotels and The Great Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Eastern 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 Great Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Eastern has no effect on the direction of Royal Orchid i.e., Royal Orchid and Great Eastern go up and down completely randomly.
Pair Corralation between Royal Orchid and Great Eastern
Assuming the 90 days trading horizon Royal Orchid is expected to generate 2.94 times less return on investment than Great Eastern. In addition to that, Royal Orchid is 1.14 times more volatile than The Great Eastern. It trades about 0.02 of its total potential returns per unit of risk. The Great Eastern is currently generating about 0.06 per unit of volatility. If you would invest 73,736 in The Great Eastern on September 12, 2024 and sell it today you would earn a total of 34,164 from holding The Great Eastern or generate 46.33% 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. The Great Eastern
Performance |
| Timeline |
| Royal Orchid Hotels |
| Great Eastern |
Royal Orchid and Great Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Orchid and Great Eastern
The main advantage of trading using opposite Royal Orchid and Great Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Orchid position performs unexpectedly, Great Eastern 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 Great Eastern will offset losses from the drop in Great Eastern's long position.| Royal Orchid vs. Hemisphere Properties India | Royal Orchid vs. Indo Borax Chemicals | Royal Orchid vs. Kingfa Science Technology | Royal Orchid vs. Alkali Metals Limited |
| Great Eastern vs. Max Financial Services | Great Eastern vs. 21st Century Management | Great Eastern vs. Kewal Kiran Clothing | Great Eastern vs. The Federal Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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