Correlation Between Royal Orchid and NIIT
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By analyzing existing cross correlation between Royal Orchid Hotels and NIIT Limited, you can compare the effects of market volatilities on Royal Orchid and NIIT 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 NIIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Orchid and NIIT.
Diversification Opportunities for Royal Orchid and NIIT
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and NIIT is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Royal Orchid Hotels and NIIT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT 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 NIIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT Limited has no effect on the direction of Royal Orchid i.e., Royal Orchid and NIIT go up and down completely randomly.
Pair Corralation between Royal Orchid and NIIT
Assuming the 90 days trading horizon Royal Orchid Hotels is expected to under-perform the NIIT. But the stock apears to be less risky and, when comparing its historical volatility, Royal Orchid Hotels is 1.74 times less risky than NIIT. The stock trades about -0.02 of its potential returns per unit of risk. The NIIT Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,613 in NIIT Limited on September 20, 2024 and sell it today you would earn a total of 9,497 from holding NIIT Limited or generate 89.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Orchid Hotels vs. NIIT Limited
Performance |
| Timeline |
| Royal Orchid Hotels |
| NIIT Limited |
Royal Orchid and NIIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Orchid and NIIT
The main advantage of trading using opposite Royal Orchid and NIIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Orchid position performs unexpectedly, NIIT 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 NIIT will offset losses from the drop in NIIT's long position.| Royal Orchid vs. Indian Railway Finance | Royal Orchid vs. Cholamandalam Financial Holdings | Royal Orchid vs. Reliance Industries Limited | Royal Orchid vs. Tata Consultancy Services |
| NIIT vs. Sudarshan Chemical Industries | NIIT vs. JGCHEMICALS LIMITED | NIIT vs. Network18 Media Investments | NIIT vs. Mangalore Chemicals Fertilizers |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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