Correlation Between EPL and Speciality Restaurants
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By analyzing existing cross correlation between EPL Limited and Speciality Restaurants Limited, you can compare the effects of market volatilities on EPL and Speciality Restaurants 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 Speciality Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPL and Speciality Restaurants.
Diversification Opportunities for EPL and Speciality Restaurants
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPL and Speciality is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding EPL Limited and Speciality Restaurants Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speciality Restaurants 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 Speciality Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speciality Restaurants has no effect on the direction of EPL i.e., EPL and Speciality Restaurants go up and down completely randomly.
Pair Corralation between EPL and Speciality Restaurants
Assuming the 90 days trading horizon EPL Limited is expected to under-perform the Speciality Restaurants. In addition to that, EPL is 2.3 times more volatile than Speciality Restaurants Limited. It trades about -0.15 of its total potential returns per unit of risk. Speciality Restaurants Limited is currently generating about -0.24 per unit of volatility. If you would invest 14,407 in Speciality Restaurants Limited on November 3, 2024 and sell it today you would lose (1,239) from holding Speciality Restaurants Limited or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPL Limited vs. Speciality Restaurants Limited
Performance |
| Timeline |
| EPL Limited |
| Speciality Restaurants |
EPL and Speciality Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPL and Speciality Restaurants
The main advantage of trading using opposite EPL and Speciality Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPL position performs unexpectedly, Speciality Restaurants 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 Speciality Restaurants will offset losses from the drop in Speciality Restaurants' long position.| EPL vs. Nucleus Software Exports | EPL vs. Arrow Greentech Limited | EPL vs. 63 moons technologies | EPL vs. LT Technology 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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