Correlation Between Viceroy Hotels and Bharat Road

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

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

Diversification Opportunities for Viceroy Hotels and Bharat Road

-0.32

Correlation Coefficient

Viceroy Hotels  Bharat Road

Very good diversification

The 3 months correlation between Viceroy and Bharat is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Viceroy Hotels Limited and Bharat Road Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bharat Road Network and Viceroy 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 Viceroy Hotels Limited are associated (or correlated) with Bharat Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bharat Road Network has no effect on the direction of Viceroy Hotels i.e., Viceroy Hotels and Bharat Road go up and down completely randomly.

Pair Corralation between Viceroy Hotels and Bharat Road

Assuming the 90 days trading horizon Viceroy Hotels Limited is expected to generate 1.39 times more return on investment than Bharat Road. However, Viceroy Hotels is 1.39 times more volatile than Bharat Road Network. It trades about 0.07 of its potential returns per unit of risk. Bharat Road Network is currently generating about -0.05 per unit of risk. If you would invest  11,600  in Viceroy Hotels Limited on September 3, 2024 and sell it today you would earn a total of  1,395  from holding Viceroy Hotels Limited or generate 12.03% return on investment over 90 days.

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

Viceroy Hotels Limited  vs.  Bharat Road Network

Viceroy Hotels

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viceroy Hotels Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Viceroy Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Bharat Road Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bharat Road Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Viceroy Hotels and Bharat Road

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

The idea behind Viceroy Hotels Limited and Bharat Road Network 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 CEOs Directory module to screen CEOs from public companies around the world.