Correlation Between HT Media and Refex Industries

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

Diversification Opportunities for HT Media and Refex Industries

0.9

Correlation Coefficient

HT Media  Refex Industries

Almost no diversification

The 3 months correlation between HTMEDIA and Refex is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Refex Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refex 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 Refex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refex Industries has no effect on the direction of HT Media i.e., HT Media and Refex Industries go up and down completely randomly.

Pair Corralation between HT Media and Refex Industries

Assuming the 90 days trading horizon HT Media Limited is expected to generate 1.08 times more return on investment than Refex Industries. However, HT Media is 1.08 times more volatile than Refex Industries Limited. It trades about -0.09 of its potential returns per unit of risk. Refex Industries Limited is currently generating about -0.11 per unit of risk. If you would invest  2,304  in HT Media Limited on December 25, 2024 and sell it today you would lose (439.00) from holding HT Media Limited or give up 19.05% 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.  Refex Industries Limited

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 weak 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.

Refex Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Refex Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with HT Media and Refex Industries

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

The idea behind HT Media Limited and Refex Industries Limited 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.