Correlation Between Samhi Hotels and Indian Railway
Can any of the company-specific risk be diversified away by investing in both Samhi Hotels and Indian Railway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Samhi Hotels and Indian Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhi Hotels Limited and Indian Railway Finance, you can compare the effects of market volatilities on Samhi Hotels and Indian Railway 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 Samhi Hotels with a short position of Indian Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhi Hotels and Indian Railway.
Diversification Opportunities for Samhi Hotels and Indian Railway
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samhi and Indian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samhi Hotels Limited and Indian Railway Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Railway Finance and Samhi Hotels 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 Samhi Hotels Limited are associated (or correlated) with Indian Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Railway Finance has no effect on the direction of Samhi Hotels i.e., Samhi Hotels and Indian Railway go up and down completely randomly.
Pair Corralation between Samhi Hotels and Indian Railway
Assuming the 90 days trading horizon Samhi Hotels Limited is expected to generate 1.01 times more return on investment than Indian Railway. However, Samhi Hotels is 1.01 times more volatile than Indian Railway Finance. It trades about 0.31 of its potential returns per unit of risk. Indian Railway Finance is currently generating about 0.25 per unit of risk. If you would invest 17,853 in Samhi Hotels Limited on September 18, 2024 and sell it today you would earn a total of 2,797 from holding Samhi Hotels Limited or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samhi Hotels Limited vs. Indian Railway Finance
Performance |
| Timeline |
| Samhi Hotels Limited |
| Indian Railway Finance |
Samhi Hotels and Indian Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhi Hotels and Indian Railway
The main advantage of trading using opposite Samhi Hotels and Indian Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhi Hotels position performs unexpectedly, Indian Railway 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 Indian Railway will offset losses from the drop in Indian Railway's long position.| Samhi Hotels vs. Indian Railway Finance | Samhi Hotels vs. Cholamandalam Financial Holdings | Samhi Hotels vs. Reliance Industries Limited | Samhi Hotels vs. Tata Consultancy Services |
| Indian Railway vs. Agarwal Industrial | Indian Railway vs. Industrial Investment Trust | Indian Railway vs. Ratnamani Metals Tubes | Indian Railway vs. LLOYDS METALS AND |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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