Correlation Between Eros International and Sambhaav Media

Can any of the company-specific risk be diversified away by investing in both Eros International and Sambhaav Media 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 International and Sambhaav Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eros International Media and Sambhaav Media Limited, you can compare the effects of market volatilities on Eros International and Sambhaav Media 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 International with a short position of Sambhaav Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros International and Sambhaav Media.

Diversification Opportunities for Eros International and Sambhaav Media

0.39

Correlation Coefficient

Eros International  Sambhaav Media

Weak diversification

The 3 months correlation between Eros and Sambhaav is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eros International Media and Sambhaav Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambhaav Media and Eros International 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 International Media are associated (or correlated) with Sambhaav Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambhaav Media has no effect on the direction of Eros International i.e., Eros International and Sambhaav Media go up and down completely randomly.

Pair Corralation between Eros International and Sambhaav Media

Assuming the 90 days trading horizon Eros International Media is expected to generate 0.92 times more return on investment than Sambhaav Media. However, Eros International Media is 1.08 times less risky than Sambhaav Media. It trades about 0.32 of its potential returns per unit of risk. Sambhaav Media Limited is currently generating about 0.04 per unit of risk. If you would invest  569.00  in Eros International Media on May 7, 2025 and sell it today you would earn a total of  212.00  from holding Eros International Media or generate 37.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Eros International Media  vs.  Sambhaav Media Limited

Eros International Media

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eros International Media are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Eros International exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sambhaav Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sambhaav Media Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sambhaav Media is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eros International and Sambhaav Media

The main advantage of trading using opposite Eros International and Sambhaav Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros International position performs unexpectedly, Sambhaav Media 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 Sambhaav Media will offset losses from the drop in Sambhaav Media's long position.

The idea behind Eros International Media and Sambhaav Media Limited 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.