Correlation Between Steel Authority and EIH Associated
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By analyzing existing cross correlation between Steel Authority of and EIH Associated Hotels, you can compare the effects of market volatilities on Steel Authority 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 Steel Authority with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and EIH Associated.
Diversification Opportunities for Steel Authority and EIH Associated
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steel and EIH is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of 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 Steel Authority 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 Steel Authority of 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 Steel Authority i.e., Steel Authority and EIH Associated go up and down completely randomly.
Pair Corralation between Steel Authority and EIH Associated
Assuming the 90 days trading horizon Steel Authority of is expected to under-perform the EIH Associated. But the stock apears to be less risky and, when comparing its historical volatility, Steel Authority of is 1.42 times less risky than EIH Associated. The stock trades about -0.11 of its potential returns per unit of risk. The EIH Associated Hotels is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 42,075 in EIH Associated Hotels on October 21, 2024 and sell it today you would lose (2,700) from holding EIH Associated Hotels or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Authority of vs. EIH Associated Hotels
Performance |
| Timeline |
| Steel Authority |
| EIH Associated Hotels |
Steel Authority and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and EIH Associated
The main advantage of trading using opposite Steel Authority and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority 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.| Steel Authority vs. Dhunseri Investments Limited | Steel Authority vs. Popular Vehicles and | Steel Authority vs. AUTHUM INVESTMENT INFRASTRUCTU | Steel Authority vs. Landmark Cars 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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