Correlation Between Juniper Hotels and Advani Hotels

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

By analyzing existing cross correlation between Juniper Hotels and Advani Hotels Resorts, you can compare the effects of market volatilities on Juniper Hotels and Advani 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 Juniper Hotels with a short position of Advani Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Hotels and Advani Hotels.

Diversification Opportunities for Juniper Hotels and Advani Hotels

0.79

Correlation Coefficient

Juniper Hotels  Advani Hotels

Poor diversification

The 3 months correlation between Juniper and Advani is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Hotels and Advani Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advani Hotels Resorts and Juniper 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 Juniper Hotels are associated (or correlated) with Advani Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advani Hotels Resorts has no effect on the direction of Juniper Hotels i.e., Juniper Hotels and Advani Hotels go up and down completely randomly.

Pair Corralation between Juniper Hotels and Advani Hotels

Assuming the 90 days trading horizon Juniper Hotels is expected to generate 1.37 times more return on investment than Advani Hotels. However, Juniper Hotels is 1.37 times more volatile than Advani Hotels Resorts. It trades about 0.18 of its potential returns per unit of risk. Advani Hotels Resorts is currently generating about 0.24 per unit of risk. If you would invest  32,320  in Juniper Hotels on September 19, 2024 and sell it today you would earn a total of  3,150  from holding Juniper Hotels or generate 9.75% return on investment over 90 days.

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

Juniper Hotels  vs.  Advani Hotels Resorts

Juniper Hotels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Juniper Hotels is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Advani Hotels Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advani Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advani Hotels is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Juniper Hotels and Advani Hotels

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

The idea behind Juniper Hotels and Advani Hotels Resorts 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.