Correlation Between Swan Energy and EIH Associated
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By analyzing existing cross correlation between Swan Energy Limited and EIH Associated Hotels, you can compare the effects of market volatilities on Swan Energy 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 Swan Energy with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Energy and EIH Associated.
Diversification Opportunities for Swan Energy and EIH Associated
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swan and EIH is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Swan Energy 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 Swan 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 Swan Energy 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 Swan Energy i.e., Swan Energy and EIH Associated go up and down completely randomly.
Pair Corralation between Swan Energy and EIH Associated
Assuming the 90 days trading horizon Swan Energy Limited is expected to generate 3.31 times more return on investment than EIH Associated. However, Swan Energy is 3.31 times more volatile than EIH Associated Hotels. It trades about 0.43 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.4 per unit of risk. If you would invest 52,740 in Swan Energy Limited on September 12, 2024 and sell it today you would earn a total of 25,300 from holding Swan Energy Limited or generate 47.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Energy Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| Swan Energy Limited |
| EIH Associated Hotels |
Swan Energy and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Energy and EIH Associated
The main advantage of trading using opposite Swan Energy and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Energy 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.| Swan Energy vs. Punjab National Bank | Swan Energy vs. Hindustan Media Ventures | Swan Energy vs. Hathway Cable Datacom | Swan Energy vs. General Insurance |
| EIH Associated vs. Hemisphere Properties India | EIH Associated vs. Indo Borax Chemicals | EIH Associated vs. Kingfa Science Technology | EIH Associated vs. Alkali Metals 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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