Correlation Between Salzer Electronics and EIH Associated
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By analyzing existing cross correlation between Salzer Electronics Limited and EIH Associated Hotels, you can compare the effects of market volatilities on Salzer Electronics 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 Salzer Electronics with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salzer Electronics and EIH Associated.
Diversification Opportunities for Salzer Electronics and EIH Associated
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salzer and EIH is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Salzer Electronics 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 Salzer Electronics 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 Salzer Electronics 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 Salzer Electronics i.e., Salzer Electronics and EIH Associated go up and down completely randomly.
Pair Corralation between Salzer Electronics and EIH Associated
Assuming the 90 days trading horizon Salzer Electronics is expected to generate 1.26 times less return on investment than EIH Associated. But when comparing it to its historical volatility, Salzer Electronics Limited is 2.54 times less risky than EIH Associated. It trades about 0.1 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20,249 in EIH Associated Hotels on August 31, 2024 and sell it today you would earn a total of 19,491 from holding EIH Associated Hotels or generate 96.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Salzer Electronics Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| Salzer Electronics |
| EIH Associated Hotels |
Salzer Electronics and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salzer Electronics and EIH Associated
The main advantage of trading using opposite Salzer Electronics and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salzer Electronics 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.| Salzer Electronics vs. Kingfa Science Technology | Salzer Electronics vs. GTL Limited | Salzer Electronics vs. Indo Amines Limited | Salzer Electronics vs. HDFC Mutual Fund |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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