Correlation Between Network18 Media and Le Travenues

Can any of the company-specific risk be diversified away by investing in both Network18 Media and Le Travenues 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 Network18 Media and Le Travenues into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network18 Media Investments and Le Travenues Technology, you can compare the effects of market volatilities on Network18 Media and Le Travenues 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 Network18 Media with a short position of Le Travenues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network18 Media and Le Travenues.

Diversification Opportunities for Network18 Media and Le Travenues

-0.03

Correlation Coefficient

Network18 Media  Le Travenues

Good diversification

The 3 months correlation between Network18 and IXIGO is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and Le Travenues Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Le Travenues Technology and Network18 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 Network18 Media Investments are associated (or correlated) with Le Travenues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Le Travenues Technology has no effect on the direction of Network18 Media i.e., Network18 Media and Le Travenues go up and down completely randomly.

Pair Corralation between Network18 Media and Le Travenues

Assuming the 90 days trading horizon Network18 Media Investments is expected to under-perform the Le Travenues. But the stock apears to be less risky and, when comparing its historical volatility, Network18 Media Investments is 1.06 times less risky than Le Travenues. The stock trades about -0.1 of its potential returns per unit of risk. The Le Travenues Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15,884  in Le Travenues Technology on September 21, 2024 and sell it today you would lose (36.00) from holding Le Travenues Technology or give up 0.23% of portfolio value over 90 days.

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

Network18 Media Investments  vs.  Le Travenues Technology

Network18 Media Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network18 Media Investments 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Le Travenues Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Le Travenues Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Le Travenues displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Network18 Media and Le Travenues

The main advantage of trading using opposite Network18 Media and Le Travenues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network18 Media position performs unexpectedly, Le Travenues 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 Le Travenues will offset losses from the drop in Le Travenues' long position.

The idea behind Network18 Media Investments and Le Travenues Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.