Correlation Between Suzlon Energy and Eros International
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By analyzing existing cross correlation between Suzlon Energy Limited and Eros International Media, you can compare the effects of market volatilities on Suzlon Energy and Eros International 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 Suzlon Energy with a short position of Eros International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzlon Energy and Eros International.
Diversification Opportunities for Suzlon Energy and Eros International
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzlon and Eros is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Suzlon Energy Limited and Eros International Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eros International Media and Suzlon Energy 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 Suzlon Energy Limited are associated (or correlated) with Eros International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eros International Media has no effect on the direction of Suzlon Energy i.e., Suzlon Energy and Eros International go up and down completely randomly.
Pair Corralation between Suzlon Energy and Eros International
Assuming the 90 days trading horizon Suzlon Energy Limited is expected to generate 1.54 times more return on investment than Eros International. However, Suzlon Energy is 1.54 times more volatile than Eros International Media. It trades about -0.08 of its potential returns per unit of risk. Eros International Media is currently generating about -0.18 per unit of risk. If you would invest 6,814 in Suzlon Energy Limited on September 2, 2024 and sell it today you would lose (516.00) from holding Suzlon Energy Limited or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzlon Energy Limited vs. Eros International Media
Performance |
| Timeline |
| Suzlon Energy Limited |
| Eros International Media |
Suzlon Energy and Eros International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzlon Energy and Eros International
The main advantage of trading using opposite Suzlon Energy and Eros International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzlon Energy position performs unexpectedly, Eros International 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 Eros International will offset losses from the drop in Eros International's long position.| Suzlon Energy vs. Newgen Software Technologies | Suzlon Energy vs. Transport of | Suzlon Energy vs. Gokul Refoils and | Suzlon Energy vs. Hilton Metal Forging |
| Eros International vs. Vodafone Idea Limited | Eros International vs. Indian Overseas Bank | Eros International vs. Indian Oil | Eros International vs. Suzlon Energy 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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