Correlation Between Eros Resources and Thunderbird Entertainment
Can any of the company-specific risk be diversified away by investing in both Eros Resources and Thunderbird Entertainment 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 Eros Resources and Thunderbird Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eros Resources Corp and Thunderbird Entertainment Group, you can compare the effects of market volatilities on Eros Resources and Thunderbird Entertainment 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 Eros Resources with a short position of Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and Thunderbird Entertainment.
Diversification Opportunities for Eros Resources and Thunderbird Entertainment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eros and Thunderbird is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment and Eros Resources 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 Eros Resources Corp are associated (or correlated) with Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Eros Resources i.e., Eros Resources and Thunderbird Entertainment go up and down completely randomly.
Pair Corralation between Eros Resources and Thunderbird Entertainment
Assuming the 90 days horizon Eros Resources Corp is expected to generate 2.14 times more return on investment than Thunderbird Entertainment. However, Eros Resources is 2.14 times more volatile than Thunderbird Entertainment Group. It trades about 0.03 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.06 per unit of risk. If you would invest 5.50 in Eros Resources Corp on December 31, 2024 and sell it today you would earn a total of 0.00 from holding Eros Resources Corp or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eros Resources Corp vs. Thunderbird Entertainment Grou
Performance |
Timeline |
Eros Resources Corp |
Thunderbird Entertainment |
Eros Resources and Thunderbird Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eros Resources and Thunderbird Entertainment
The main advantage of trading using opposite Eros Resources and Thunderbird Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources position performs unexpectedly, Thunderbird Entertainment 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 Thunderbird Entertainment will offset losses from the drop in Thunderbird Entertainment's long position.Eros Resources vs. Upstart Investments | Eros Resources vs. Diamond Estates Wines | Eros Resources vs. Canadian Utilities Limited | Eros Resources vs. Highwood Asset Management |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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