Correlation Between MMTC and EIH Associated
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By analyzing existing cross correlation between MMTC Limited and EIH Associated Hotels, you can compare the effects of market volatilities on MMTC 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 MMTC with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTC and EIH Associated.
Diversification Opportunities for MMTC and EIH Associated
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMTC and EIH is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MMTC Limited 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 MMTC 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 MMTC Limited 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 MMTC i.e., MMTC and EIH Associated go up and down completely randomly.
Pair Corralation between MMTC and EIH Associated
Assuming the 90 days trading horizon MMTC Limited is expected to under-perform the EIH Associated. But the stock apears to be less risky and, when comparing its historical volatility, MMTC Limited is 1.08 times less risky than EIH Associated. The stock trades about -0.22 of its potential returns per unit of risk. The EIH Associated Hotels is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 41,050 in EIH Associated Hotels on August 25, 2024 and sell it today you would lose (2,690) from holding EIH Associated Hotels or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
MMTC Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| MMTC Limited |
| EIH Associated Hotels |
MMTC and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMTC and EIH Associated
The main advantage of trading using opposite MMTC and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTC 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.| MMTC vs. Reliance Industries Limited | MMTC vs. Life Insurance | MMTC vs. Indian Oil | MMTC vs. Oil Natural Gas |
| EIH Associated vs. MMTC Limited | EIH Associated vs. Kingfa Science Technology | EIH Associated vs. Rico Auto Industries | EIH Associated vs. GACM Technologies 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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