Correlation Between 63 Moons and EIH Associated

Can any of the company-specific risk be diversified away by investing in both 63 Moons and EIH Associated at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 63 Moons and EIH Associated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 63 moons technologies and EIH Associated Hotels, you can compare the effects of market volatilities on 63 Moons 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 63 Moons with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of 63 Moons and EIH Associated.

Diversification Opportunities for 63 Moons and EIH Associated

0.82

Correlation Coefficient

63 Moons  EIH Associated

Very poor diversification

The 3 months correlation between 63MOONS and EIH is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding 63 moons technologies 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 63 Moons 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 63 moons technologies 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 63 Moons i.e., 63 Moons and EIH Associated go up and down completely randomly.

Pair Corralation between 63 Moons and EIH Associated

Assuming the 90 days trading horizon 63 moons technologies is expected to generate 1.18 times more return on investment than EIH Associated. However, 63 Moons is 1.18 times more volatile than EIH Associated Hotels. It trades about -0.01 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about -0.02 per unit of risk. If you would invest  91,760  in 63 moons technologies on October 12, 2024 and sell it today you would lose (2,130) from holding 63 moons technologies or give up 2.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

63 moons technologies  vs.  EIH Associated Hotels

63 moons technologies

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 63 moons technologies are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, 63 Moons unveiled solid returns over the last few months and may actually be approaching a breakup point.

EIH Associated Hotels

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EIH Associated Hotels are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, EIH Associated is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 63 Moons and EIH Associated

The main advantage of trading using opposite 63 Moons and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 63 Moons 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.

The idea behind 63 moons technologies and EIH Associated Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.