Correlation Between Rainbow Childrens and EIH Associated
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By analyzing existing cross correlation between Rainbow Childrens Medicare and EIH Associated Hotels, you can compare the effects of market volatilities on Rainbow Childrens 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 Rainbow Childrens with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rainbow Childrens and EIH Associated.
Diversification Opportunities for Rainbow Childrens and EIH Associated
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rainbow and EIH is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rainbow Childrens Medicare 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 Rainbow Childrens 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 Rainbow Childrens Medicare 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 Rainbow Childrens i.e., Rainbow Childrens and EIH Associated go up and down completely randomly.
Pair Corralation between Rainbow Childrens and EIH Associated
Assuming the 90 days trading horizon Rainbow Childrens Medicare is expected to generate 1.3 times more return on investment than EIH Associated. However, Rainbow Childrens is 1.3 times more volatile than EIH Associated Hotels. It trades about 0.22 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.16 per unit of risk. If you would invest 138,595 in Rainbow Childrens Medicare on August 25, 2024 and sell it today you would earn a total of 19,890 from holding Rainbow Childrens Medicare or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rainbow Childrens Medicare vs. EIH Associated Hotels
Performance |
| Timeline |
| Rainbow Childrens |
| EIH Associated Hotels |
Rainbow Childrens and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rainbow Childrens and EIH Associated
The main advantage of trading using opposite Rainbow Childrens and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rainbow Childrens 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.| Rainbow Childrens vs. Indian Railway Finance | Rainbow Childrens vs. Cholamandalam Financial Holdings | Rainbow Childrens vs. Reliance Industries Limited | Rainbow Childrens vs. Tata Consultancy Services |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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