Correlation Between Eros International and LT Foods
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By analyzing existing cross correlation between Eros International Media and LT Foods Limited, you can compare the effects of market volatilities on Eros International and LT Foods 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 LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and LT Foods.
Diversification Opportunities for Eros International and LT Foods
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eros and LTFOODS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and LT Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Foods 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 LT Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Foods Limited has no effect on the direction of Eros International i.e., Eros International and LT Foods go up and down completely randomly.
Pair Corralation between Eros International and LT Foods
Assuming the 90 days trading horizon Eros International Media is expected to under-perform the LT Foods. But the stock apears to be less risky and, when comparing its historical volatility, Eros International Media is 1.7 times less risky than LT Foods. The stock trades about -0.34 of its potential returns per unit of risk. The LT Foods Limited is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 42,725 in LT Foods Limited on October 12, 2024 and sell it today you would lose (1,755) from holding LT Foods Limited or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros International Media vs. LT Foods Limited
Performance |
| Timeline |
| Eros International Media |
| LT Foods Limited |
Eros International and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros International and LT Foods
The main advantage of trading using opposite Eros International and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, LT Foods 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 LT Foods will offset losses from the drop in LT Foods' long position.| Eros International vs. Spencers Retail Limited | Eros International vs. Akme Fintrade India | Eros International vs. ADF Foods Limited | Eros International vs. Cartrade Tech Limited |
| LT Foods vs. Sapphire Foods India | LT Foods vs. Eros International Media | LT Foods vs. HT Media Limited | LT Foods vs. Silly Monks Entertainment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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