Correlation Between EIH Associated and Embassy Office
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By analyzing existing cross correlation between EIH Associated Hotels and Embassy Office Parks, you can compare the effects of market volatilities on EIH Associated and Embassy Office 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 EIH Associated with a short position of Embassy Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and Embassy Office.
Diversification Opportunities for EIH Associated and Embassy Office
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIH and Embassy is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and Embassy Office Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embassy Office Parks and EIH Associated 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 EIH Associated Hotels are associated (or correlated) with Embassy Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embassy Office Parks has no effect on the direction of EIH Associated i.e., EIH Associated and Embassy Office go up and down completely randomly.
Pair Corralation between EIH Associated and Embassy Office
Assuming the 90 days trading horizon EIH Associated Hotels is expected to generate 1.82 times more return on investment than Embassy Office. However, EIH Associated is 1.82 times more volatile than Embassy Office Parks. It trades about 0.07 of its potential returns per unit of risk. Embassy Office Parks is currently generating about -0.09 per unit of risk. If you would invest 35,590 in EIH Associated Hotels on October 26, 2024 and sell it today you would earn a total of 3,495 from holding EIH Associated Hotels or generate 9.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
EIH Associated Hotels vs. Embassy Office Parks
Performance |
Timeline |
EIH Associated Hotels |
Embassy Office Parks |
EIH Associated and Embassy Office Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EIH Associated and Embassy Office
The main advantage of trading using opposite EIH Associated and Embassy Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated position performs unexpectedly, Embassy Office 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 Embassy Office will offset losses from the drop in Embassy Office's long position.EIH Associated vs. Patanjali Foods 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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