Correlation Between Indo Borax and EIH Associated
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By analyzing existing cross correlation between Indo Borax Chemicals and EIH Associated Hotels, you can compare the effects of market volatilities on Indo Borax and EIH Associated 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 Indo Borax with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Borax and EIH Associated.
Diversification Opportunities for Indo Borax and EIH Associated
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indo and EIH is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Indo Borax Chemicals and EIH Associated Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIH Associated Hotels and Indo Borax 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 Indo Borax Chemicals are associated (or correlated) with EIH Associated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIH Associated Hotels has no effect on the direction of Indo Borax i.e., Indo Borax and EIH Associated go up and down completely randomly.
Pair Corralation between Indo Borax and EIH Associated
Assuming the 90 days trading horizon Indo Borax is expected to generate 3.16 times less return on investment than EIH Associated. But when comparing it to its historical volatility, Indo Borax Chemicals is 2.77 times less risky than EIH Associated. It trades about 0.04 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 36,294 in EIH Associated Hotels on September 1, 2024 and sell it today you would earn a total of 4,191 from holding EIH Associated Hotels or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Borax Chemicals vs. EIH Associated Hotels
Performance |
| Timeline |
| Indo Borax Chemicals |
| EIH Associated Hotels |
Indo Borax and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Borax and EIH Associated
The main advantage of trading using opposite Indo Borax and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Borax position performs unexpectedly, EIH Associated 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 EIH Associated will offset losses from the drop in EIH Associated's long position.| Indo Borax vs. Vardhman Special Steels | Indo Borax vs. Vraj Iron and | Indo Borax vs. STEEL EXCHANGE INDIA | Indo Borax vs. BF Investment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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