Correlation Between Apollo Sindoori and Lemon Tree

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

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

Diversification Opportunities for Apollo Sindoori and Lemon Tree

0.81

Correlation Coefficient

Apollo Sindoori  Lemon Tree

Very poor diversification

The 3 months correlation between Apollo and Lemon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Sindoori Hotels and Lemon Tree Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemon Tree Hotels and Apollo Sindoori 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 Apollo Sindoori Hotels are associated (or correlated) with Lemon Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemon Tree Hotels has no effect on the direction of Apollo Sindoori i.e., Apollo Sindoori and Lemon Tree go up and down completely randomly.

Pair Corralation between Apollo Sindoori and Lemon Tree

Assuming the 90 days trading horizon Apollo Sindoori Hotels is expected to generate 1.26 times more return on investment than Lemon Tree. However, Apollo Sindoori is 1.26 times more volatile than Lemon Tree Hotels. It trades about 0.07 of its potential returns per unit of risk. Lemon Tree Hotels is currently generating about 0.06 per unit of risk. If you would invest  135,630  in Apollo Sindoori Hotels on April 23, 2025 and sell it today you would earn a total of  12,820  from holding Apollo Sindoori Hotels or generate 9.45% return on investment over 90 days.

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

Apollo Sindoori Hotels  vs.  Lemon Tree Hotels

Apollo Sindoori Hotels

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Sindoori Hotels are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical indicators, Apollo Sindoori may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Lemon Tree Hotels

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lemon Tree Hotels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Lemon Tree may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Apollo Sindoori and Lemon Tree

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

The idea behind Apollo Sindoori Hotels and Lemon Tree Hotels 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.