Correlation Between Eros International and India Glycols
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By analyzing existing cross correlation between Eros International Media and India Glycols Limited, you can compare the effects of market volatilities on Eros International and India Glycols 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 India Glycols. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and India Glycols.
Diversification Opportunities for Eros International and India Glycols
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eros and India is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and India Glycols Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Glycols Limited 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 India Glycols. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Glycols Limited has no effect on the direction of Eros International i.e., Eros International and India Glycols go up and down completely randomly.
Pair Corralation between Eros International and India Glycols
Assuming the 90 days trading horizon Eros International is expected to generate 2.77 times less return on investment than India Glycols. But when comparing it to its historical volatility, Eros International Media is 1.29 times less risky than India Glycols. It trades about 0.14 of its potential returns per unit of risk. India Glycols Limited is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 113,300 in India Glycols Limited on September 23, 2024 and sell it today you would earn a total of 19,810 from holding India Glycols Limited or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eros International Media vs. India Glycols Limited
Performance |
| Timeline |
| Eros International Media |
| India Glycols Limited |
Eros International and India Glycols Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros International and India Glycols
The main advantage of trading using opposite Eros International and India Glycols positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, India Glycols 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 India Glycols will offset losses from the drop in India Glycols' long position.| Eros International vs. Bharat Road Network | Eros International vs. EIH Associated Hotels | Eros International vs. Transport of | Eros International vs. Golden Tobacco Limited |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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