Correlation Between Eros Resources and Gitennes Exploration
Can any of the company-specific risk be diversified away by investing in both Eros Resources and Gitennes Exploration 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 Resources and Gitennes Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eros Resources Corp and Gitennes Exploration, you can compare the effects of market volatilities on Eros Resources and Gitennes Exploration 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 Resources with a short position of Gitennes Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and Gitennes Exploration.
Diversification Opportunities for Eros Resources and Gitennes Exploration
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eros and Gitennes is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and Gitennes Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitennes Exploration and Eros Resources 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 Resources Corp are associated (or correlated) with Gitennes Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gitennes Exploration has no effect on the direction of Eros Resources i.e., Eros Resources and Gitennes Exploration go up and down completely randomly.
Pair Corralation between Eros Resources and Gitennes Exploration
Assuming the 90 days horizon Eros Resources Corp is expected to under-perform the Gitennes Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Eros Resources Corp is 1.31 times less risky than Gitennes Exploration. The stock trades about -0.13 of its potential returns per unit of risk. The Gitennes Exploration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Gitennes Exploration on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Gitennes Exploration or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros Resources Corp vs. Gitennes Exploration
Performance |
| Timeline |
| Eros Resources Corp |
| Gitennes Exploration |
Eros Resources and Gitennes Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and Gitennes Exploration
The main advantage of trading using opposite Eros Resources and Gitennes Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources position performs unexpectedly, Gitennes Exploration 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 Gitennes Exploration will offset losses from the drop in Gitennes Exploration's long position.| Eros Resources vs. Evertz Technologies Limited | Eros Resources vs. Sparx Technology | Eros Resources vs. CVW CleanTech | Eros Resources vs. Firan Technology Group |
| Gitennes Exploration vs. TGS Esports | Gitennes Exploration vs. Ocumetics Technology Corp | Gitennes Exploration vs. CVW CleanTech | Gitennes Exploration vs. Contagious Gaming |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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