Correlation Between Eros International and Indian Hotels
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By analyzing existing cross correlation between Eros International Media and The Indian Hotels, you can compare the effects of market volatilities on Eros International and Indian Hotels 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 International with a short position of Indian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and Indian Hotels.
Diversification Opportunities for Eros International and Indian Hotels
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eros and Indian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and The Indian Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Hotels and Eros International 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 International Media are associated (or correlated) with Indian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Hotels has no effect on the direction of Eros International i.e., Eros International and Indian Hotels go up and down completely randomly.
Pair Corralation between Eros International and Indian Hotels
Assuming the 90 days trading horizon Eros International Media is expected to under-perform the Indian Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Eros International Media is 1.07 times less risky than Indian Hotels. The stock trades about -0.42 of its potential returns per unit of risk. The The Indian Hotels is currently generating about -0.33 of returns per unit of risk over similar time horizon. If you would invest 86,765 in The Indian Hotels on October 16, 2024 and sell it today you would lose (11,155) from holding The Indian Hotels or give up 12.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Eros International Media vs. The Indian Hotels
Performance |
| Timeline |
| Eros International Media |
| Indian Hotels |
Eros International and Indian Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros International and Indian Hotels
The main advantage of trading using opposite Eros International and Indian Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, Indian Hotels 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 Indian Hotels will offset losses from the drop in Indian Hotels' long position.| Eros International vs. Manaksia Steels Limited | Eros International vs. Vardhman Special Steels | Eros International vs. Music Broadcast Limited | Eros International vs. Shyam Metalics and |
| Indian Hotels vs. Indian Metals Ferro | Indian Hotels vs. Eros International Media | Indian Hotels vs. Zee Entertainment Enterprises | Indian Hotels vs. Imagicaaworld Entertainment Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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