Correlation Between HT Media and Shemaroo Entertainment

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

Diversification Opportunities for HT Media and Shemaroo Entertainment

0.6

Correlation Coefficient

HT Media  Shemaroo Entertainment

Poor diversification

The 3 months correlation between HTMEDIA and Shemaroo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Shemaroo Entertainment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shemaroo Entertainment 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 Shemaroo Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shemaroo Entertainment has no effect on the direction of HT Media i.e., HT Media and Shemaroo Entertainment go up and down completely randomly.

Pair Corralation between HT Media and Shemaroo Entertainment

Assuming the 90 days trading horizon HT Media is expected to generate 1.11 times less return on investment than Shemaroo Entertainment. But when comparing it to its historical volatility, HT Media Limited is 1.26 times less risky than Shemaroo Entertainment. It trades about 0.02 of its potential returns per unit of risk. Shemaroo Entertainment Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  15,510  in Shemaroo Entertainment Limited on October 4, 2024 and sell it today you would earn a total of  497.00  from holding Shemaroo Entertainment Limited or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

HT Media Limited  vs.  Shemaroo Entertainment Limited

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Shemaroo Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shemaroo Entertainment 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 basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with HT Media and Shemaroo Entertainment

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

The idea behind HT Media Limited and Shemaroo Entertainment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.