Correlation Between Network18 Media and Radiant Cash

Can any of the company-specific risk be diversified away by investing in both Network18 Media and Radiant Cash 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 Radiant Cash 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 Radiant Cash Management, you can compare the effects of market volatilities on Network18 Media and Radiant Cash 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 Radiant Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network18 Media and Radiant Cash.

Diversification Opportunities for Network18 Media and Radiant Cash

0.14

Correlation Coefficient

Network18 Media  Radiant Cash

Average diversification

The 3 months correlation between Network18 and Radiant is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and Radiant Cash Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Cash Management 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 Radiant Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Cash Management has no effect on the direction of Network18 Media i.e., Network18 Media and Radiant Cash go up and down completely randomly.

Pair Corralation between Network18 Media and Radiant Cash

Assuming the 90 days trading horizon Network18 Media Investments is expected to under-perform the Radiant Cash. In addition to that, Network18 Media is 1.56 times more volatile than Radiant Cash Management. It trades about -0.22 of its total potential returns per unit of risk. Radiant Cash Management is currently generating about -0.07 per unit of volatility. If you would invest  7,673  in Radiant Cash Management on October 4, 2024 and sell it today you would lose (171.00) from holding Radiant Cash Management or give up 2.23% of portfolio value over 90 days.

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

Network18 Media Investments  vs.  Radiant Cash Management

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 quite persistent forward-looking signals, Network18 Media is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Radiant Cash Management

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Network18 Media and Radiant Cash

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

The idea behind Network18 Media Investments and Radiant Cash Management 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.