Correlation Between Automotive Stampings and Hindustan Media

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

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

Diversification Opportunities for Automotive Stampings and Hindustan Media

0.56

Correlation Coefficient

Automotive Stampings  Hindustan Media

Very weak diversification

The 3 months correlation between Automotive and Hindustan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Stampings and and Hindustan Media Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Media Ventures and Automotive Stampings 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 Automotive Stampings and are associated (or correlated) with Hindustan Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Media Ventures has no effect on the direction of Automotive Stampings i.e., Automotive Stampings and Hindustan Media go up and down completely randomly.

Pair Corralation between Automotive Stampings and Hindustan Media

Assuming the 90 days trading horizon Automotive Stampings and is expected to generate 1.15 times more return on investment than Hindustan Media. However, Automotive Stampings is 1.15 times more volatile than Hindustan Media Ventures. It trades about 0.06 of its potential returns per unit of risk. Hindustan Media Ventures is currently generating about 0.05 per unit of risk. If you would invest  35,990  in Automotive Stampings and on September 26, 2024 and sell it today you would earn a total of  32,410  from holding Automotive Stampings and or generate 90.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Automotive Stampings and  vs.  Hindustan Media Ventures

Automotive Stampings and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Automotive Stampings and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hindustan Media Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hindustan Media Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hindustan Media 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 Automotive Stampings and Hindustan Media

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

The idea behind Automotive Stampings and and Hindustan Media Ventures 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.