Correlation Between Network18 Media and Usha Martin

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

Diversification Opportunities for Network18 Media and Usha Martin

-0.02

Correlation Coefficient

Network18 Media  Usha Martin

Good diversification

The 3 months correlation between Network18 and Usha is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and Usha Martin Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Martin Education 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 Usha Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usha Martin Education has no effect on the direction of Network18 Media i.e., Network18 Media and Usha Martin go up and down completely randomly.

Pair Corralation between Network18 Media and Usha Martin

Assuming the 90 days trading horizon Network18 Media is expected to generate 1.87 times less return on investment than Usha Martin. But when comparing it to its historical volatility, Network18 Media Investments is 1.1 times less risky than Usha Martin. It trades about 0.02 of its potential returns per unit of risk. Usha Martin Education is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  475.00  in Usha Martin Education on October 8, 2024 and sell it today you would earn a total of  177.00  from holding Usha Martin Education or generate 37.26% return on investment over 90 days.

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

Network18 Media Investments  vs.  Usha Martin Education

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 latest unfluctuating performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Usha Martin Education

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Usha Martin Education are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Usha Martin is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Network18 Media and Usha Martin

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

The idea behind Network18 Media Investments and Usha Martin Education 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.