Correlation Between Kamat Hotels and LLOYDS METALS

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

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

Diversification Opportunities for Kamat Hotels and LLOYDS METALS

-0.17

Correlation Coefficient

Kamat Hotels  LLOYDS METALS

Good diversification

The 3 months correlation between Kamat and LLOYDS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kamat Hotels Limited and LLOYDS METALS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS METALS AND and Kamat 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 Kamat Hotels Limited are associated (or correlated) with LLOYDS METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS METALS AND has no effect on the direction of Kamat Hotels i.e., Kamat Hotels and LLOYDS METALS go up and down completely randomly.

Pair Corralation between Kamat Hotels and LLOYDS METALS

Assuming the 90 days trading horizon Kamat Hotels Limited is expected to generate 1.53 times more return on investment than LLOYDS METALS. However, Kamat Hotels is 1.53 times more volatile than LLOYDS METALS AND. It trades about 0.13 of its potential returns per unit of risk. LLOYDS METALS AND is currently generating about 0.06 per unit of risk. If you would invest  21,434  in Kamat Hotels Limited on November 29, 2024 and sell it today you would earn a total of  7,843  from holding Kamat Hotels Limited or generate 36.59% return on investment over 90 days.

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

Kamat Hotels Limited  vs.  LLOYDS METALS AND

Kamat Hotels Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamat Hotels Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Kamat Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

LLOYDS METALS AND

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Kamat Hotels and LLOYDS METALS

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

The idea behind Kamat Hotels Limited and LLOYDS METALS AND 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.