Correlation Between EIH Associated and MMTC
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By analyzing existing cross correlation between EIH Associated Hotels and MMTC Limited, you can compare the effects of market volatilities on EIH Associated and MMTC 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 MMTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and MMTC.
Diversification Opportunities for EIH Associated and MMTC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EIH and MMTC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and MMTC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMTC Limited 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 MMTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMTC Limited has no effect on the direction of EIH Associated i.e., EIH Associated and MMTC go up and down completely randomly.
Pair Corralation between EIH Associated and MMTC
Assuming the 90 days trading horizon EIH Associated Hotels is expected to generate 2.31 times more return on investment than MMTC. However, EIH Associated is 2.31 times more volatile than MMTC Limited. It trades about 0.05 of its potential returns per unit of risk. MMTC Limited is currently generating about 0.08 per unit of risk. If you would invest 23,337 in EIH Associated Hotels on August 29, 2024 and sell it today you would earn a total of 14,873 from holding EIH Associated Hotels or generate 63.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.48% |
| Values | Daily Returns |
EIH Associated Hotels vs. MMTC Limited
Performance |
| Timeline |
| EIH Associated Hotels |
| MMTC Limited |
EIH Associated and MMTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIH Associated and MMTC
The main advantage of trading using opposite EIH Associated and MMTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated position performs unexpectedly, MMTC 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 MMTC will offset losses from the drop in MMTC's long position.| EIH Associated vs. Nalwa Sons Investments | EIH Associated vs. The State Trading | EIH Associated vs. Mangalam Drugs And | EIH Associated vs. Bombay Burmah Trading |
| MMTC vs. The Orissa Minerals | MMTC vs. DSJ Keep Learning | MMTC vs. Kingfa Science Technology | MMTC vs. Rico Auto Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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