Correlation Between HT Media and Surya Roshni

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

Diversification Opportunities for HT Media and Surya Roshni

0.79

Correlation Coefficient

HT Media  Surya Roshni

Poor diversification

The 3 months correlation between HTMEDIA and Surya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Surya Roshni Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Roshni Limited 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 Surya Roshni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Roshni Limited has no effect on the direction of HT Media i.e., HT Media and Surya Roshni go up and down completely randomly.

Pair Corralation between HT Media and Surya Roshni

Assuming the 90 days trading horizon HT Media Limited is expected to under-perform the Surya Roshni. But the stock apears to be less risky and, when comparing its historical volatility, HT Media Limited is 1.32 times less risky than Surya Roshni. The stock trades about -0.11 of its potential returns per unit of risk. The Surya Roshni Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  28,063  in Surya Roshni Limited on December 26, 2024 and sell it today you would lose (2,826) from holding Surya Roshni Limited or give up 10.07% of portfolio value over 90 days.

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

HT Media Limited  vs.  Surya Roshni 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 inconsistent 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.

Surya Roshni Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surya Roshni Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Surya Roshni is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HT Media and Surya Roshni

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

The idea behind HT Media Limited and Surya Roshni 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 Global Correlations module to find global opportunities by holding instruments from different markets.