Correlation Between Eros Resources and K Bro
Can any of the company-specific risk be diversified away by investing in both Eros Resources and K Bro 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 K Bro 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 K Bro Linen, you can compare the effects of market volatilities on Eros Resources and K Bro 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 K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and K Bro.
Diversification Opportunities for Eros Resources and K Bro
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eros and KBL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen 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 K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Eros Resources i.e., Eros Resources and K Bro go up and down completely randomly.
Pair Corralation between Eros Resources and K Bro
Assuming the 90 days horizon Eros Resources is expected to generate 1.73 times less return on investment than K Bro. In addition to that, Eros Resources is 3.03 times more volatile than K Bro Linen. It trades about 0.01 of its total potential returns per unit of risk. K Bro Linen is currently generating about 0.05 per unit of volatility. If you would invest 2,715 in K Bro Linen on September 3, 2024 and sell it today you would earn a total of 1,100 from holding K Bro Linen or generate 40.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eros Resources Corp vs. K Bro Linen
Performance |
| Timeline |
| Eros Resources Corp |
| K Bro Linen |
Eros Resources and K Bro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and K Bro
The main advantage of trading using opposite Eros Resources and K Bro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources position performs unexpectedly, K Bro 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 K Bro will offset losses from the drop in K Bro's long position.| Eros Resources vs. Precious Metals And | Eros Resources vs. Gatos Silver | Eros Resources vs. Plaza Retail REIT | Eros Resources vs. Nicola Mining |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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