Correlation Between Visa Steel and Kamat Hotels
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By analyzing existing cross correlation between Visa Steel Limited and Kamat Hotels Limited, you can compare the effects of market volatilities on Visa Steel and Kamat 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 Visa Steel with a short position of Kamat Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa Steel and Kamat Hotels.
Diversification Opportunities for Visa Steel and Kamat Hotels
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Kamat is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Visa Steel Limited and Kamat Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamat Hotels Limited and Visa Steel 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 Visa Steel Limited are associated (or correlated) with Kamat Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamat Hotels Limited has no effect on the direction of Visa Steel i.e., Visa Steel and Kamat Hotels go up and down completely randomly.
Pair Corralation between Visa Steel and Kamat Hotels
Assuming the 90 days trading horizon Visa Steel Limited is expected to generate 1.19 times more return on investment than Kamat Hotels. However, Visa Steel is 1.19 times more volatile than Kamat Hotels Limited. It trades about 0.54 of its potential returns per unit of risk. Kamat Hotels Limited is currently generating about -0.24 per unit of risk. If you would invest 3,082 in Visa Steel Limited on October 21, 2024 and sell it today you would earn a total of 1,238 from holding Visa Steel Limited or generate 40.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.0% |
Values | Daily Returns |
Visa Steel Limited vs. Kamat Hotels Limited
Performance |
Timeline |
Visa Steel Limited |
Kamat Hotels Limited |
Visa Steel and Kamat Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa Steel and Kamat Hotels
The main advantage of trading using opposite Visa Steel and Kamat Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa Steel position performs unexpectedly, Kamat 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 Kamat Hotels will offset losses from the drop in Kamat Hotels' long position.Visa Steel vs. NMDC Limited | Visa Steel vs. Steel Authority of | Visa Steel vs. Embassy Office Parks | Visa Steel vs. Jai Balaji Industries |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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