Sell on Unitech and Buy HDIL

A perfect hedge and return making strategy. Unitech balancesheet is over stretched as of now. Its networth is on back of large equity dilutuion on FY 11 basis the stock is stretched at 20-30 times forward on NAV adjusted basis provided if i value the real estate close to 2007 levels. Meaning in best case scnario a PE of 30 odd times on FY-11 earnings.
Now lets talk about statistical corelation between HDIL and Unitech. The freee fall in Unitech is far more and high volatile underlines the stock. Remeber a fall form 72 to 29 in a day. I reteriate a sell on UNitech at 85 with tgt of 37 and a buy on HDIL on declines arnd 160 levels. The reason being the stock of HDIL as better valuation and if one goes wrong on realiy the fall in unitech would be more. Make sure the value of short = value of long and not 100 shs of unitech to matched with 10 shs of HDIL

Please note this is more on statistical arbitrage and major contribution is given by a friend of mine