Correlation Between HT Media and Raj Rayon

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

Diversification Opportunities for HT Media and Raj Rayon

0.14

Correlation Coefficient

HT Media  Raj Rayon

Average diversification

The 3 months correlation between HTMEDIA and Raj is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Raj Rayon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raj Rayon Industries 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 Raj Rayon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raj Rayon Industries has no effect on the direction of HT Media i.e., HT Media and Raj Rayon go up and down completely randomly.

Pair Corralation between HT Media and Raj Rayon

Assuming the 90 days trading horizon HT Media Limited is expected to under-perform the Raj Rayon. In addition to that, HT Media is 1.71 times more volatile than Raj Rayon Industries. It trades about -0.17 of its total potential returns per unit of risk. Raj Rayon Industries is currently generating about -0.02 per unit of volatility. If you would invest  2,350  in Raj Rayon Industries on December 5, 2024 and sell it today you would lose (70.00) from holding Raj Rayon Industries or give up 2.98% of portfolio value over 90 days.

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

HT Media Limited  vs.  Raj Rayon Industries

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.

Raj Rayon Industries

Risk-Adjusted Performance

Weak

Over the last 90 days Raj Rayon Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Raj Rayon is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HT Media and Raj Rayon

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

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