Correlation Between Indian Hotels and PB Fintech

Can any of the company-specific risk be diversified away by investing in both Indian Hotels and PB Fintech 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 Indian Hotels and PB Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Indian Hotels and PB Fintech Limited, you can compare the effects of market volatilities on Indian Hotels and PB Fintech 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 PB Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Hotels and PB Fintech.

Diversification Opportunities for Indian Hotels and PB Fintech

0.83

Correlation Coefficient

Indian Hotels  PB Fintech

Very poor diversification

The 3 months correlation between Indian and POLICYBZR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Indian Hotels and PB Fintech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PB Fintech Limited 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 PB Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PB Fintech Limited has no effect on the direction of Indian Hotels i.e., Indian Hotels and PB Fintech go up and down completely randomly.

Pair Corralation between Indian Hotels and PB Fintech

Assuming the 90 days trading horizon The Indian Hotels is expected to generate 0.64 times more return on investment than PB Fintech. However, The Indian Hotels is 1.56 times less risky than PB Fintech. It trades about -0.07 of its potential returns per unit of risk. PB Fintech Limited is currently generating about -0.1 per unit of risk. If you would invest  88,965  in The Indian Hotels on December 29, 2024 and sell it today you would lose (10,210) from holding The Indian Hotels or give up 11.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

The Indian Hotels  vs.  PB Fintech Limited

Indian Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Indian Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

PB Fintech Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days PB Fintech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Indian Hotels and PB Fintech

The main advantage of trading using opposite Indian Hotels and PB Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Hotels position performs unexpectedly, PB Fintech 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 PB Fintech will offset losses from the drop in PB Fintech's long position.

The idea behind The Indian Hotels and PB Fintech Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.