Correlation Between Imagicaaworld Entertainment and Eros International
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By analyzing existing cross correlation between Imagicaaworld Entertainment Limited and Eros International Media, you can compare the effects of market volatilities on Imagicaaworld Entertainment and Eros International 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 Imagicaaworld Entertainment with a short position of Eros International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagicaaworld Entertainment and Eros International.
Diversification Opportunities for Imagicaaworld Entertainment and Eros International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Imagicaaworld and Eros is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Imagicaaworld Entertainment Li and Eros International Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eros International Media and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment Limited are associated (or correlated) with Eros International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eros International Media has no effect on the direction of Imagicaaworld Entertainment i.e., Imagicaaworld Entertainment and Eros International go up and down completely randomly.
Pair Corralation between Imagicaaworld Entertainment and Eros International
Assuming the 90 days trading horizon Imagicaaworld Entertainment Limited is expected to generate 0.73 times more return on investment than Eros International. However, Imagicaaworld Entertainment Limited is 1.38 times less risky than Eros International. It trades about -0.03 of its potential returns per unit of risk. Eros International Media is currently generating about -0.1 per unit of risk. If you would invest 7,356 in Imagicaaworld Entertainment Limited on August 29, 2024 and sell it today you would lose (119.00) from holding Imagicaaworld Entertainment Limited or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imagicaaworld Entertainment Li vs. Eros International Media
Performance |
| Timeline |
| Imagicaaworld Entertainment |
| Eros International Media |
Imagicaaworld Entertainment and Eros International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imagicaaworld Entertainment and Eros International
The main advantage of trading using opposite Imagicaaworld Entertainment and Eros International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imagicaaworld Entertainment position performs unexpectedly, Eros International 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 Eros International will offset losses from the drop in Eros International's long position.The idea behind Imagicaaworld Entertainment Limited and Eros International Media 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.
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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