Correlation Between EIH Associated and Indian Renewable
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By analyzing existing cross correlation between EIH Associated Hotels and Indian Renewable Energy, you can compare the effects of market volatilities on EIH Associated and Indian Renewable 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 EIH Associated with a short position of Indian Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and Indian Renewable.
Diversification Opportunities for EIH Associated and Indian Renewable
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EIH and Indian is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and Indian Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Renewable Energy and EIH Associated 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 EIH Associated Hotels are associated (or correlated) with Indian Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Renewable Energy has no effect on the direction of EIH Associated i.e., EIH Associated and Indian Renewable go up and down completely randomly.
Pair Corralation between EIH Associated and Indian Renewable
Assuming the 90 days trading horizon EIH Associated is expected to generate 1.47 times less return on investment than Indian Renewable. But when comparing it to its historical volatility, EIH Associated Hotels is 1.67 times less risky than Indian Renewable. It trades about 0.37 of its potential returns per unit of risk. Indian Renewable Energy is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 19,449 in Indian Renewable Energy on September 13, 2024 and sell it today you would earn a total of 3,094 from holding Indian Renewable Energy or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIH Associated Hotels vs. Indian Renewable Energy
Performance |
| Timeline |
| EIH Associated Hotels |
| Indian Renewable Energy |
EIH Associated and Indian Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIH Associated and Indian Renewable
The main advantage of trading using opposite EIH Associated and Indian Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated position performs unexpectedly, Indian Renewable 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 Indian Renewable will offset losses from the drop in Indian Renewable's long position.| EIH Associated vs. Indian Railway Finance | EIH Associated vs. Cholamandalam Financial Holdings | EIH Associated vs. Reliance Industries Limited | EIH Associated vs. Tata Consultancy Services |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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