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
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MakeMyTrip and GreenTree is -0.03. 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 1.22 times more volatile than GreenTree Hospitality Group. It trades about -0.08 of its total potential returns per unit of risk. GreenTree Hospitality Group is currently generating about 0.02 per unit of volatility. If you would invest 319.00 in GreenTree Hospitality Group on February 1, 2024 and sell it today you would earn a total of 1.00 from holding GreenTree Hospitality Group or generate 0.31% return on investment 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.The idea behind MakeMyTrip Limited and GreenTree Hospitality Group 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.GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Despegar Corp | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality vs. MakeMyTrip Limited |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |