Correlation Between Eros Media and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Eros Media and Reservoir Media 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 Eros Media and Reservoir Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eros Media World and Reservoir Media Management, you can compare the effects of market volatilities on Eros Media and Reservoir Media 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 Eros Media with a short position of Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Media and Reservoir Media.
Diversification Opportunities for Eros Media and Reservoir Media
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eros and Reservoir is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eros Media World and Reservoir Media Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media Mana and Eros Media 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 Eros Media World are associated (or correlated) with Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media Mana has no effect on the direction of Eros Media i.e., Eros Media and Reservoir Media go up and down completely randomly.
Pair Corralation between Eros Media and Reservoir Media
Assuming the 90 days horizon Eros Media World is expected to generate 3.85 times more return on investment than Reservoir Media. However, Eros Media is 3.85 times more volatile than Reservoir Media Management. It trades about 0.18 of its potential returns per unit of risk. Reservoir Media Management is currently generating about 0.05 per unit of risk. If you would invest 23.00 in Eros Media World on August 24, 2024 and sell it today you would lose (13.00) from holding Eros Media World or give up 56.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.07% |
| Values | Daily Returns |
Eros Media World vs. Reservoir Media Management
Performance |
| Timeline |
| Eros Media World |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Reservoir Media Mana |
Eros Media and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Media and Reservoir Media
The main advantage of trading using opposite Eros Media and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Media position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media's long position.| Eros Media vs. Maxx Sports TV | Eros Media vs. American Picture House | Eros Media vs. Imax Corp | Eros Media vs. Marcus |
| Reservoir Media vs. Reservoir Media | Reservoir Media vs. Surrozen Warrant | Reservoir Media vs. PureCycle Technologies | Reservoir Media vs. Vivid Seats Warrant |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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