Correlation Between Shemaroo Entertainment and HT Media

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

Diversification Opportunities for Shemaroo Entertainment and HT Media

0.6

Correlation Coefficient

Shemaroo Entertainment  HT Media

Poor diversification

The 3 months correlation between Shemaroo and HTMEDIA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shemaroo Entertainment Limited and HT Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HT Media Limited 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 HT Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HT Media Limited has no effect on the direction of Shemaroo Entertainment i.e., Shemaroo Entertainment and HT Media go up and down completely randomly.

Pair Corralation between Shemaroo Entertainment and HT Media

Assuming the 90 days trading horizon Shemaroo Entertainment Limited is expected to under-perform the HT Media. In addition to that, Shemaroo Entertainment is 1.08 times more volatile than HT Media Limited. It trades about -0.08 of its total potential returns per unit of risk. HT Media Limited is currently generating about -0.02 per unit of volatility. If you would invest  2,464  in HT Media Limited on October 4, 2024 and sell it today you would lose (116.00) from holding HT Media Limited or give up 4.71% of portfolio value over 90 days.

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

Shemaroo Entertainment Limited  vs.  HT Media Limited

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.

HT Media Limited

Risk-Adjusted Performance

0 of 100

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 somewhat strong fundamental indicators, HT Media is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shemaroo Entertainment and HT Media

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

The idea behind Shemaroo Entertainment Limited and HT Media 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.