Correlation Between Shemaroo Entertainment and Hisar Metal

Can any of the company-specific risk be diversified away by investing in both Shemaroo Entertainment and Hisar Metal 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 Shemaroo Entertainment and Hisar Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shemaroo Entertainment Limited and Hisar Metal Industries, you can compare the effects of market volatilities on Shemaroo Entertainment and Hisar Metal 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 Shemaroo Entertainment with a short position of Hisar Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shemaroo Entertainment and Hisar Metal.

Diversification Opportunities for Shemaroo Entertainment and Hisar Metal

0.26

Correlation Coefficient

Shemaroo Entertainment  Hisar Metal

Modest diversification

The 3 months correlation between Shemaroo and Hisar is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shemaroo Entertainment Limited and Hisar Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisar Metal Industries and Shemaroo Entertainment 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 Shemaroo Entertainment Limited are associated (or correlated) with Hisar Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisar Metal Industries has no effect on the direction of Shemaroo Entertainment i.e., Shemaroo Entertainment and Hisar Metal go up and down completely randomly.

Pair Corralation between Shemaroo Entertainment and Hisar Metal

Assuming the 90 days trading horizon Shemaroo Entertainment Limited is expected to under-perform the Hisar Metal. But the stock apears to be less risky and, when comparing its historical volatility, Shemaroo Entertainment Limited is 1.0 times less risky than Hisar Metal. The stock trades about -0.08 of its potential returns per unit of risk. The Hisar Metal Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  19,267  in Hisar Metal Industries on October 4, 2024 and sell it today you would earn a total of  2,606  from holding Hisar Metal Industries or generate 13.53% return on investment over 90 days.

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

Shemaroo Entertainment Limited  vs.  Hisar Metal Industries

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.

Hisar Metal Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hisar Metal Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hisar Metal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shemaroo Entertainment and Hisar Metal

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

The idea behind Shemaroo Entertainment Limited and Hisar Metal Industries 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.