Correlation Between HT Media and Entertainment Network

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

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

Diversification Opportunities for HT Media and Entertainment Network

0.64

Correlation Coefficient

HT Media  Entertainment Network

Poor diversification

The 3 months correlation between HTMEDIA and Entertainment is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding HT Media Limited and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network and HT 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 HT Media Limited are associated (or correlated) with Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of HT Media i.e., HT Media and Entertainment Network go up and down completely randomly.

Pair Corralation between HT Media and Entertainment Network

Assuming the 90 days trading horizon HT Media Limited is expected to generate 0.93 times more return on investment than Entertainment Network. However, HT Media Limited is 1.08 times less risky than Entertainment Network. It trades about -0.01 of its potential returns per unit of risk. Entertainment Network Limited is currently generating about -0.07 per unit of risk. If you would invest  2,493  in HT Media Limited on September 3, 2024 and sell it today you would lose (92.00) from holding HT Media Limited or give up 3.69% of portfolio value over 90 days.

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

HT Media Limited  vs.  Entertainment Network Limited

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 current stock price disturbance, may contribute to short-term losses for the investors.

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HT Media and Entertainment Network

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

The idea behind HT Media Limited and Entertainment Network 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.