Correlation Between Entertainment Network and Hybrid Financial

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

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

Diversification Opportunities for Entertainment Network and Hybrid Financial

-0.14

Correlation Coefficient

Entertainment Network  Hybrid Financial

Good diversification

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

Pair Corralation between Entertainment Network and Hybrid Financial

Assuming the 90 days trading horizon Entertainment Network Limited is expected to under-perform the Hybrid Financial. But the stock apears to be less risky and, when comparing its historical volatility, Entertainment Network Limited is 1.24 times less risky than Hybrid Financial. The stock trades about -0.04 of its potential returns per unit of risk. The Hybrid Financial Services is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,299  in Hybrid Financial Services on September 20, 2024 and sell it today you would earn a total of  235.00  from holding Hybrid Financial Services or generate 18.09% return on investment over 90 days.

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

Entertainment Network Limited  vs.  Hybrid Financial Services

Entertainment Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entertainment Network Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hybrid Financial Services

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hybrid Financial Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Hybrid Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entertainment Network and Hybrid Financial

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

The idea behind Entertainment Network Limited and Hybrid Financial Services 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.