Correlation Between MakeMyTrip and GreenTree Hospitality
Can any of the company-specific risk be diversified away by investing in both MakeMyTrip and GreenTree Hospitality 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 MakeMyTrip and GreenTree Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MakeMyTrip Limited and GreenTree Hospitality Group, you can compare the effects of market volatilities on MakeMyTrip and GreenTree Hospitality 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 MakeMyTrip with a short position of GreenTree Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of MakeMyTrip and GreenTree Hospitality.
Diversification Opportunities for MakeMyTrip and GreenTree Hospitality
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MakeMyTrip and GreenTree is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MakeMyTrip Limited and GreenTree Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTree Hospitality and MakeMyTrip 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 MakeMyTrip Limited are associated (or correlated) with GreenTree Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTree Hospitality has no effect on the direction of MakeMyTrip i.e., MakeMyTrip and GreenTree Hospitality go up and down completely randomly.
Pair Corralation between MakeMyTrip and GreenTree Hospitality
Given the investment horizon of 90 days MakeMyTrip Limited is expected to under-perform the GreenTree Hospitality. In addition to that, MakeMyTrip is 1.25 times more volatile than GreenTree Hospitality Group. It trades about -0.05 of its total potential returns per unit of risk. GreenTree Hospitality Group is currently generating about -0.03 per unit of volatility. If you would invest 319.00 in GreenTree Hospitality Group on January 30, 2024 and sell it today you would lose (9.00) from holding GreenTree Hospitality Group or give up 2.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MakeMyTrip Limited vs. GreenTree Hospitality Group
Performance |
Timeline |
MakeMyTrip Limited |
GreenTree Hospitality |
MakeMyTrip and GreenTree Hospitality Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MakeMyTrip and GreenTree Hospitality
The main advantage of trading using opposite MakeMyTrip and GreenTree Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MakeMyTrip position performs unexpectedly, GreenTree Hospitality 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 GreenTree Hospitality will offset losses from the drop in GreenTree Hospitality's long position.MakeMyTrip vs. TUI AG | MakeMyTrip vs. Inspirato | MakeMyTrip vs. TripAdvisor | MakeMyTrip vs. Travel Leisure Co |
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Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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