Correlation Between EIH Associated and Tarapur Transformers
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By analyzing existing cross correlation between EIH Associated Hotels and Tarapur Transformers Limited, you can compare the effects of market volatilities on EIH Associated and Tarapur Transformers 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 Tarapur Transformers. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and Tarapur Transformers.
Diversification Opportunities for EIH Associated and Tarapur Transformers
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EIH and Tarapur is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and Tarapur Transformers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarapur Transformers 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 Tarapur Transformers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarapur Transformers has no effect on the direction of EIH Associated i.e., EIH Associated and Tarapur Transformers go up and down completely randomly.
Pair Corralation between EIH Associated and Tarapur Transformers
Assuming the 90 days trading horizon EIH Associated is expected to generate 4.39 times less return on investment than Tarapur Transformers. But when comparing it to its historical volatility, EIH Associated Hotels is 2.7 times less risky than Tarapur Transformers. It trades about 0.48 of its potential returns per unit of risk. Tarapur Transformers Limited is currently generating about 0.79 of returns per unit of risk over similar time horizon. If you would invest 2,999 in Tarapur Transformers Limited on September 24, 2024 and sell it today you would earn a total of 1,550 from holding Tarapur Transformers Limited or generate 51.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIH Associated Hotels vs. Tarapur Transformers Limited
Performance |
| Timeline |
| EIH Associated Hotels |
| Tarapur Transformers |
EIH Associated and Tarapur Transformers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIH Associated and Tarapur Transformers
The main advantage of trading using opposite EIH Associated and Tarapur Transformers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated position performs unexpectedly, Tarapur Transformers 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 Tarapur Transformers will offset losses from the drop in Tarapur Transformers' long position.| EIH Associated vs. Kaushalya Infrastructure Development | EIH Associated vs. Tarapur Transformers Limited | EIH Associated vs. Kingfa Science Technology | EIH Associated vs. Rico Auto Industries |
| Tarapur Transformers vs. Asian Hotels Limited | Tarapur Transformers vs. Taj GVK Hotels | Tarapur Transformers vs. The Indian Hotels | Tarapur Transformers vs. EIH Associated Hotels |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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