Correlation Between Persistent Systems and EIH Associated
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By analyzing existing cross correlation between Persistent Systems Limited and EIH Associated Hotels, you can compare the effects of market volatilities on Persistent Systems 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 Persistent Systems with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Persistent Systems and EIH Associated.
Diversification Opportunities for Persistent Systems and EIH Associated
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Persistent and EIH is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Persistent Systems 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 Persistent Systems 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 Persistent Systems 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 Persistent Systems i.e., Persistent Systems and EIH Associated go up and down completely randomly.
Pair Corralation between Persistent Systems and EIH Associated
Assuming the 90 days trading horizon Persistent Systems is expected to generate 1.51 times less return on investment than EIH Associated. But when comparing it to its historical volatility, Persistent Systems Limited is 3.48 times less risky than EIH Associated. It trades about 0.07 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 38,829 in EIH Associated Hotels on November 3, 2024 and sell it today you would lose (1,024) from holding EIH Associated Hotels or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Persistent Systems Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| Persistent Systems |
| EIH Associated Hotels |
Persistent Systems and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Persistent Systems and EIH Associated
The main advantage of trading using opposite Persistent Systems and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Persistent Systems 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.| Persistent Systems vs. Rajnandini Metal Limited | Persistent Systems vs. Shyam Metalics and | Persistent Systems vs. PNC Infratech Limited | Persistent Systems vs. AXISCADES Technologies 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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