Correlation Between Eros Media and Innovid Corp

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

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

Diversification Opportunities for Eros Media and Innovid Corp

-0.1

Correlation Coefficient

Eros Media  Innovid Corp

Good diversification

The 3 months correlation between Eros and Innovid is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eros Media World and Innovid Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovid Corp and Eros Media 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 Media World are associated (or correlated) with Innovid Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovid Corp has no effect on the direction of Eros Media i.e., Eros Media and Innovid Corp go up and down completely randomly.

Pair Corralation between Eros Media and Innovid Corp

If you would invest  210.00  in Innovid Corp on March 12, 2024 and sell it today you would lose (1.00) from holding Innovid Corp or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Eros Media World  vs.  Innovid Corp

Eros Media World

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eros Media World has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eros Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Innovid Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Innovid Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Innovid Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eros Media and Innovid Corp

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

The idea behind Eros Media World and Innovid Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.