Correlation Between Eros Resources and Stella Jones
Can any of the company-specific risk be diversified away by investing in both Eros Resources and Stella Jones 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 Stella Jones 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 Stella Jones, you can compare the effects of market volatilities on Eros Resources and Stella Jones 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 Stella Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and Stella Jones.
Diversification Opportunities for Eros Resources and Stella Jones
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eros and Stella is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones 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 Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of Eros Resources i.e., Eros Resources and Stella Jones go up and down completely randomly.
Pair Corralation between Eros Resources and Stella Jones
Assuming the 90 days horizon Eros Resources Corp is expected to generate 1.9 times more return on investment than Stella Jones. However, Eros Resources is 1.9 times more volatile than Stella Jones. It trades about -0.13 of its potential returns per unit of risk. Stella Jones is currently generating about -0.25 per unit of risk. If you would invest 5.00 in Eros Resources Corp on August 28, 2024 and sell it today you would lose (1.00) from holding Eros Resources Corp or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros Resources Corp vs. Stella Jones
Performance |
| Timeline |
| Eros Resources Corp |
| Stella Jones |
Eros Resources and Stella Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and Stella Jones
The main advantage of trading using opposite Eros Resources and Stella Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources position performs unexpectedly, Stella Jones 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 Stella Jones will offset losses from the drop in Stella Jones' long position.| Eros Resources vs. Evertz Technologies Limited | Eros Resources vs. Sparx Technology | Eros Resources vs. CVW CleanTech | Eros Resources vs. Firan Technology Group |
| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |