Correlation Between Royal Orchid and Samhi Hotels
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By analyzing existing cross correlation between Royal Orchid Hotels and Samhi Hotels Limited, you can compare the effects of market volatilities on Royal Orchid and Samhi 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 Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Orchid and Samhi Hotels.
Diversification Opportunities for Royal Orchid and Samhi Hotels
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Royal and Samhi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Royal Orchid Hotels and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of Royal Orchid i.e., Royal Orchid and Samhi Hotels go up and down completely randomly.
Pair Corralation between Royal Orchid and Samhi Hotels
Assuming the 90 days trading horizon Royal Orchid Hotels is expected to generate 1.35 times more return on investment than Samhi Hotels. However, Royal Orchid is 1.35 times more volatile than Samhi Hotels Limited. It trades about 0.04 of its potential returns per unit of risk. Samhi Hotels Limited is currently generating about -0.13 per unit of risk. If you would invest 35,220 in Royal Orchid Hotels on October 20, 2024 and sell it today you would earn a total of 620.00 from holding Royal Orchid Hotels or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Orchid Hotels vs. Samhi Hotels Limited
Performance |
| Timeline |
| Royal Orchid Hotels |
| Samhi Hotels Limited |
Royal Orchid and Samhi Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Orchid and Samhi Hotels
The main advantage of trading using opposite Royal Orchid and Samhi Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Orchid position performs unexpectedly, Samhi 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 Samhi Hotels will offset losses from the drop in Samhi Hotels' long position.| Royal Orchid vs. Silgo Retail Limited | Royal Orchid vs. POWERGRID Infrastructure Investment | Royal Orchid vs. Bajaj Holdings Investment | Royal Orchid vs. AUTHUM INVESTMENT INFRASTRUCTU |
| Samhi Hotels vs. POWERGRID Infrastructure Investment | Samhi Hotels vs. AUTHUM INVESTMENT INFRASTRUCTU | Samhi Hotels vs. Varun Beverages Limited | Samhi Hotels vs. Kalyani Investment |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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