Correlation Between Eros Resources and Pollard Banknote
Can any of the company-specific risk be diversified away by investing in both Eros Resources and Pollard Banknote 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 Pollard Banknote 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 Pollard Banknote Limited, you can compare the effects of market volatilities on Eros Resources and Pollard Banknote 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 Pollard Banknote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and Pollard Banknote.
Diversification Opportunities for Eros Resources and Pollard Banknote
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eros and Pollard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote 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 Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of Eros Resources i.e., Eros Resources and Pollard Banknote go up and down completely randomly.
Pair Corralation between Eros Resources and Pollard Banknote
Assuming the 90 days horizon Eros Resources Corp is expected to generate 1.36 times more return on investment than Pollard Banknote. However, Eros Resources is 1.36 times more volatile than Pollard Banknote Limited. It trades about 0.05 of its potential returns per unit of risk. Pollard Banknote Limited is currently generating about -0.02 per unit of risk. If you would invest 3.50 in Eros Resources Corp on September 1, 2024 and sell it today you would earn a total of 0.50 from holding Eros Resources Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros Resources Corp vs. Pollard Banknote Limited
Performance |
| Timeline |
| Eros Resources Corp |
| Pollard Banknote |
Eros Resources and Pollard Banknote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and Pollard Banknote
The main advantage of trading using opposite Eros Resources and Pollard Banknote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources position performs unexpectedly, Pollard Banknote 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 Pollard Banknote will offset losses from the drop in Pollard Banknote's long position.| Eros Resources vs. Lion One Metals | Eros Resources vs. Ramp Metals | Eros Resources vs. NeXGold Mining Corp | Eros Resources vs. Stampede Drilling |
| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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