Correlation Between Eros International and Touchwood Entertainment
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By analyzing existing cross correlation between Eros International Media and Touchwood Entertainment Limited, you can compare the effects of market volatilities on Eros International and Touchwood Entertainment 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 Touchwood Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and Touchwood Entertainment.
Diversification Opportunities for Eros International and Touchwood Entertainment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eros and Touchwood is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and Touchwood Entertainment Limite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchwood Entertainment 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 Touchwood Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchwood Entertainment has no effect on the direction of Eros International i.e., Eros International and Touchwood Entertainment go up and down completely randomly.
Pair Corralation between Eros International and Touchwood Entertainment
Assuming the 90 days trading horizon Eros International Media is expected to generate 0.5 times more return on investment than Touchwood Entertainment. However, Eros International Media is 2.0 times less risky than Touchwood Entertainment. It trades about -0.31 of its potential returns per unit of risk. Touchwood Entertainment Limited is currently generating about -0.19 per unit of risk. If you would invest 1,528 in Eros International Media on October 10, 2024 and sell it today you would lose (159.00) from holding Eros International Media or give up 10.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eros International Media vs. Touchwood Entertainment Limite
Performance |
Timeline |
Eros International Media |
Touchwood Entertainment |
Eros International and Touchwood Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eros International and Touchwood Entertainment
The main advantage of trading using opposite Eros International and Touchwood Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, Touchwood Entertainment 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 Touchwood Entertainment will offset losses from the drop in Touchwood Entertainment's long position.Eros International vs. Ortel Communications Limited | Eros International vs. Datamatics Global Services | Eros International vs. Network18 Media Investments | Eros International vs. Music Broadcast 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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