Correlation Between Indian Hotels and Bodal Chemicals
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By analyzing existing cross correlation between The Indian Hotels and Bodal Chemicals Limited, you can compare the effects of market volatilities on Indian Hotels and Bodal Chemicals 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 Indian Hotels with a short position of Bodal Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Hotels and Bodal Chemicals.
Diversification Opportunities for Indian Hotels and Bodal Chemicals
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indian and Bodal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Indian Hotels and Bodal Chemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodal Chemicals and Indian 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 The Indian Hotels are associated (or correlated) with Bodal Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodal Chemicals has no effect on the direction of Indian Hotels i.e., Indian Hotels and Bodal Chemicals go up and down completely randomly.
Pair Corralation between Indian Hotels and Bodal Chemicals
Assuming the 90 days trading horizon The Indian Hotels is expected to generate 0.73 times more return on investment than Bodal Chemicals. However, The Indian Hotels is 1.36 times less risky than Bodal Chemicals. It trades about 0.12 of its potential returns per unit of risk. Bodal Chemicals Limited is currently generating about 0.0 per unit of risk. If you would invest 31,268 in The Indian Hotels on September 26, 2024 and sell it today you would earn a total of 54,997 from holding The Indian Hotels or generate 175.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
The Indian Hotels vs. Bodal Chemicals Limited
Performance |
Timeline |
Indian Hotels |
Bodal Chemicals |
Indian Hotels and Bodal Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indian Hotels and Bodal Chemicals
The main advantage of trading using opposite Indian Hotels and Bodal Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Hotels position performs unexpectedly, Bodal Chemicals 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 Bodal Chemicals will offset losses from the drop in Bodal Chemicals' long position.Indian Hotels vs. Embassy Office Parks | Indian Hotels vs. HDFC Asset Management | Indian Hotels vs. Allied Blenders Distillers | Indian Hotels vs. Transport of |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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