Correlation Between HT Media and Byke Hospitality

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

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

Diversification Opportunities for HT Media and Byke Hospitality

-0.24

Correlation Coefficient

HT Media  Byke Hospitality

Very good diversification

The 3 months correlation between HTMEDIA and Byke is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and The Byke Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byke Hospitality and HT 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 HT Media Limited are associated (or correlated) with Byke Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byke Hospitality has no effect on the direction of HT Media i.e., HT Media and Byke Hospitality go up and down completely randomly.

Pair Corralation between HT Media and Byke Hospitality

Assuming the 90 days trading horizon HT Media Limited is expected to under-perform the Byke Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, HT Media Limited is 1.22 times less risky than Byke Hospitality. The stock trades about -0.03 of its potential returns per unit of risk. The The Byke Hospitality is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6,689  in The Byke Hospitality on October 8, 2024 and sell it today you would earn a total of  3,185  from holding The Byke Hospitality or generate 47.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

HT Media Limited  vs.  The Byke Hospitality

HT Media Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HT Media Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, HT Media is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Byke Hospitality

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Byke Hospitality are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Byke Hospitality unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HT Media and Byke Hospitality

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

The idea behind HT Media Limited and The Byke Hospitality 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.