Correlation Between Central Bank and Oriental Hotels
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By analyzing existing cross correlation between Central Bank of and Oriental Hotels Limited, you can compare the effects of market volatilities on Central Bank and Oriental 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 Central Bank with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Bank and Oriental Hotels.
Diversification Opportunities for Central Bank and Oriental Hotels
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Central and Oriental is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Central Bank of and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Hotels and Central Bank 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 Central Bank of are associated (or correlated) with Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of Central Bank i.e., Central Bank and Oriental Hotels go up and down completely randomly.
Pair Corralation between Central Bank and Oriental Hotels
Assuming the 90 days trading horizon Central Bank of is expected to under-perform the Oriental Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Central Bank of is 1.11 times less risky than Oriental Hotels. The stock trades about -0.09 of its potential returns per unit of risk. The Oriental Hotels Limited is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 18,438 in Oriental Hotels Limited on September 25, 2024 and sell it today you would lose (662.00) from holding Oriental Hotels Limited or give up 3.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Central Bank of vs. Oriental Hotels Limited
Performance |
Timeline |
Central Bank |
Oriental Hotels |
Central Bank and Oriental Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Central Bank and Oriental Hotels
The main advantage of trading using opposite Central Bank and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Bank position performs unexpectedly, Oriental 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.Central Bank vs. Sonata Software Limited | Central Bank vs. Uniinfo Telecom Services | Central Bank vs. LT Technology Services | Central Bank vs. Kavveri Telecom Products |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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