Correlation Between Eros International and Silver Touch
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By analyzing existing cross correlation between Eros International Media and Silver Touch Technologies, you can compare the effects of market volatilities on Eros International and Silver Touch 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 Silver Touch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and Silver Touch.
Diversification Opportunities for Eros International and Silver Touch
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eros and Silver is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and Silver Touch Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Touch Technologies 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 Silver Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Touch Technologies has no effect on the direction of Eros International i.e., Eros International and Silver Touch go up and down completely randomly.
Pair Corralation between Eros International and Silver Touch
Assuming the 90 days trading horizon Eros International Media is expected to under-perform the Silver Touch. In addition to that, Eros International is 1.06 times more volatile than Silver Touch Technologies. It trades about -0.41 of its total potential returns per unit of risk. Silver Touch Technologies is currently generating about -0.09 per unit of volatility. If you would invest 67,990 in Silver Touch Technologies on October 20, 2024 and sell it today you would lose (2,405) from holding Silver Touch Technologies or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eros International Media vs. Silver Touch Technologies
Performance |
| Timeline |
| Eros International Media |
| Silver Touch Technologies |
Eros International and Silver Touch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros International and Silver Touch
The main advantage of trading using opposite Eros International and Silver Touch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, Silver Touch 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 Silver Touch will offset losses from the drop in Silver Touch's long position.The idea behind Eros International Media and Silver Touch Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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