Correlation Between HT Media and Edelweiss Financial

Can any of the company-specific risk be diversified away by investing in both HT Media and Edelweiss Financial 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 Edelweiss Financial 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 Edelweiss Financial Services, you can compare the effects of market volatilities on HT Media and Edelweiss Financial 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 Edelweiss Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HT Media and Edelweiss Financial.

Diversification Opportunities for HT Media and Edelweiss Financial

0.95

Correlation Coefficient

HT Media  Edelweiss Financial

Almost no diversification

The 3 months correlation between HTMEDIA and Edelweiss is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Edelweiss Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edelweiss Financial 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 Edelweiss Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edelweiss Financial has no effect on the direction of HT Media i.e., HT Media and Edelweiss Financial go up and down completely randomly.

Pair Corralation between HT Media and Edelweiss Financial

Assuming the 90 days trading horizon HT Media Limited is expected to under-perform the Edelweiss Financial. In addition to that, HT Media is 1.05 times more volatile than Edelweiss Financial Services. It trades about -0.15 of its total potential returns per unit of risk. Edelweiss Financial Services is currently generating about -0.15 per unit of volatility. If you would invest  12,283  in Edelweiss Financial Services on December 29, 2024 and sell it today you would lose (3,284) from holding Edelweiss Financial Services or give up 26.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

HT Media Limited  vs.  Edelweiss Financial Services

HT Media Limited

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Edelweiss Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edelweiss Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with HT Media and Edelweiss Financial

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

The idea behind HT Media Limited and Edelweiss Financial Services 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.