Correlation Between Baazar Style and Lemon Tree
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By analyzing existing cross correlation between Baazar Style Retail and Lemon Tree Hotels, you can compare the effects of market volatilities on Baazar Style and Lemon Tree 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 Baazar Style with a short position of Lemon Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baazar Style and Lemon Tree.
Diversification Opportunities for Baazar Style and Lemon Tree
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baazar and Lemon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Baazar Style Retail and Lemon Tree Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemon Tree Hotels and Baazar Style 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 Baazar Style Retail are associated (or correlated) with Lemon Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemon Tree Hotels has no effect on the direction of Baazar Style i.e., Baazar Style and Lemon Tree go up and down completely randomly.
Pair Corralation between Baazar Style and Lemon Tree
Assuming the 90 days trading horizon Baazar Style Retail is expected to under-perform the Lemon Tree. In addition to that, Baazar Style is 1.52 times more volatile than Lemon Tree Hotels. It trades about -0.06 of its total potential returns per unit of risk. Lemon Tree Hotels is currently generating about 0.04 per unit of volatility. If you would invest 9,170 in Lemon Tree Hotels on September 2, 2024 and sell it today you would earn a total of 3,889 from holding Lemon Tree Hotels or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 12.22% |
| Values | Daily Returns |
Baazar Style Retail vs. Lemon Tree Hotels
Performance |
| Timeline |
| Baazar Style Retail |
| Lemon Tree Hotels |
Baazar Style and Lemon Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baazar Style and Lemon Tree
The main advantage of trading using opposite Baazar Style and Lemon Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baazar Style position performs unexpectedly, Lemon Tree 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 Lemon Tree will offset losses from the drop in Lemon Tree's long position.| Baazar Style vs. Trent Limited | Baazar Style vs. V2 Retail Limited | Baazar Style vs. Credo Brands Marketing | Baazar Style vs. Kingfa Science Technology |
| Lemon Tree vs. Indian Railway Finance | Lemon Tree vs. Cholamandalam Financial Holdings | Lemon Tree vs. Reliance Industries Limited | Lemon Tree vs. Tata Consultancy Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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