Correlation Between Oriental Hotels and Baazar Style

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

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

Diversification Opportunities for Oriental Hotels and Baazar Style

-0.02

Correlation Coefficient

Oriental Hotels  Baazar Style

Good diversification

The 3 months correlation between Oriental and Baazar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Hotels Limited and Baazar Style Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baazar Style Retail and Oriental 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 Oriental Hotels Limited are associated (or correlated) with Baazar Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baazar Style Retail has no effect on the direction of Oriental Hotels i.e., Oriental Hotels and Baazar Style go up and down completely randomly.

Pair Corralation between Oriental Hotels and Baazar Style

Assuming the 90 days trading horizon Oriental Hotels Limited is expected to generate 0.84 times more return on investment than Baazar Style. However, Oriental Hotels Limited is 1.19 times less risky than Baazar Style. It trades about 0.08 of its potential returns per unit of risk. Baazar Style Retail is currently generating about -0.08 per unit of risk. If you would invest  6,985  in Oriental Hotels Limited on October 3, 2024 and sell it today you would earn a total of  10,338  from holding Oriental Hotels Limited or generate 148.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	16.46%
Values	Daily Returns

Oriental Hotels Limited  vs.  Baazar Style Retail

Oriental Hotels

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Hotels Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Oriental Hotels is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Baazar Style Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baazar Style Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Oriental Hotels and Baazar Style

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

The idea behind Oriental Hotels Limited and Baazar Style Retail 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.