Correlation Between EPL and Iris Clothings
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By analyzing existing cross correlation between EPL Limited and Iris Clothings Limited, you can compare the effects of market volatilities on EPL and Iris Clothings 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 EPL with a short position of Iris Clothings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPL and Iris Clothings.
Diversification Opportunities for EPL and Iris Clothings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EPL and Iris is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EPL Limited and Iris Clothings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Clothings and EPL 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 EPL Limited are associated (or correlated) with Iris Clothings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Clothings has no effect on the direction of EPL i.e., EPL and Iris Clothings go up and down completely randomly.
Pair Corralation between EPL and Iris Clothings
Assuming the 90 days trading horizon EPL Limited is expected to generate 1.3 times more return on investment than Iris Clothings. However, EPL is 1.3 times more volatile than Iris Clothings Limited. It trades about 0.16 of its potential returns per unit of risk. Iris Clothings Limited is currently generating about 0.06 per unit of risk. If you would invest 25,028 in EPL Limited on September 12, 2024 and sell it today you would earn a total of 2,622 from holding EPL Limited or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EPL Limited vs. Iris Clothings Limited
Performance |
| Timeline |
| EPL Limited |
| Iris Clothings |
EPL and Iris Clothings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPL and Iris Clothings
The main advantage of trading using opposite EPL and Iris Clothings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPL position performs unexpectedly, Iris Clothings 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 Iris Clothings will offset losses from the drop in Iris Clothings' long position.| EPL vs. Dev Information Technology | EPL vs. ideaForge Technology Limited | EPL vs. Visa Steel Limited | EPL vs. STEEL EXCHANGE INDIA |
| Iris Clothings vs. Hemisphere Properties India | Iris Clothings vs. Indo Borax Chemicals | Iris Clothings vs. Kingfa Science Technology | Iris Clothings vs. Alkali Metals Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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