Correlation Between HT Media and Indian Card

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

Diversification Opportunities for HT Media and Indian Card

-0.09

Correlation Coefficient

HT Media  Indian Card

Good diversification

The 3 months correlation between HTMEDIA and Indian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Indian Card Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Card Clothing 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 Indian Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Card Clothing has no effect on the direction of HT Media i.e., HT Media and Indian Card go up and down completely randomly.

Pair Corralation between HT Media and Indian Card

Assuming the 90 days trading horizon HT Media Limited is expected to under-perform the Indian Card. But the stock apears to be less risky and, when comparing its historical volatility, HT Media Limited is 2.72 times less risky than Indian Card. The stock trades about -0.25 of its potential returns per unit of risk. The Indian Card Clothing is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  32,470  in Indian Card Clothing on October 8, 2024 and sell it today you would lose (2,925) from holding Indian Card Clothing or give up 9.01% of portfolio value over 90 days.

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

HT Media Limited  vs.  Indian Card Clothing

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.

Indian Card Clothing

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indian Card Clothing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Indian Card exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HT Media and Indian Card

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

The idea behind HT Media Limited and Indian Card Clothing 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.