Correlation Between Network18 Media and Bikaji Foods

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

Diversification Opportunities for Network18 Media and Bikaji Foods

0.34

Correlation Coefficient

Network18 Media  Bikaji Foods

Weak diversification

The 3 months correlation between Network18 and Bikaji is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and Bikaji Foods International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikaji Foods Interna 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 Bikaji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikaji Foods Interna has no effect on the direction of Network18 Media i.e., Network18 Media and Bikaji Foods go up and down completely randomly.

Pair Corralation between Network18 Media and Bikaji Foods

Assuming the 90 days trading horizon Network18 Media Investments is expected to generate 1.3 times more return on investment than Bikaji Foods. However, Network18 Media is 1.3 times more volatile than Bikaji Foods International. It trades about -0.04 of its potential returns per unit of risk. Bikaji Foods International is currently generating about -0.13 per unit of risk. If you would invest  8,210  in Network18 Media Investments on September 24, 2024 and sell it today you would lose (776.00) from holding Network18 Media Investments or give up 9.45% of portfolio value over 90 days.

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

Network18 Media Investments  vs.  Bikaji Foods International

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 weak 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.

Bikaji Foods Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bikaji Foods International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Network18 Media and Bikaji Foods

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

The idea behind Network18 Media Investments and Bikaji Foods International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.