Correlation Between GACM Technologies and Hindustan Media

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

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

Diversification Opportunities for GACM Technologies and Hindustan Media

0.65

Correlation Coefficient

GACM Technologies  Hindustan Media

Poor diversification

The 3 months correlation between GACM and Hindustan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited 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 GACM Technologies 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 GACM Technologies Limited 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 GACM Technologies i.e., GACM Technologies and Hindustan Media go up and down completely randomly.

Pair Corralation between GACM Technologies and Hindustan Media

Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Hindustan Media. In addition to that, GACM Technologies is 1.43 times more volatile than Hindustan Media Ventures. It trades about -0.03 of its total potential returns per unit of risk. Hindustan Media Ventures is currently generating about 0.06 per unit of volatility. If you would invest  8,774  in Hindustan Media Ventures on October 5, 2024 and sell it today you would earn a total of  591.00  from holding Hindustan Media Ventures or generate 6.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

GACM Technologies Limited  vs.  Hindustan Media Ventures

GACM Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, GACM Technologies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hindustan Media Ventures

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hindustan Media Ventures are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Hindustan Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GACM Technologies and Hindustan Media

The main advantage of trading using opposite GACM Technologies and Hindustan Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies 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 GACM Technologies Limited 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.