Correlation Between Radaan Mediaworks and Indian Hotels

Can any of the company-specific risk be diversified away by investing in both Radaan Mediaworks and Indian Hotels 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 Radaan Mediaworks and Indian Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Radaan Mediaworks India and The Indian Hotels, you can compare the effects of market volatilities on Radaan Mediaworks and Indian Hotels 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 Radaan Mediaworks with a short position of Indian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radaan Mediaworks and Indian Hotels.

Diversification Opportunities for Radaan Mediaworks and Indian Hotels

0.94

Correlation Coefficient

Radaan Mediaworks  Indian Hotels

Almost no diversification

The 3 months correlation between Radaan and Indian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Radaan Mediaworks India and The Indian Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Hotels and Radaan Mediaworks 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 Radaan Mediaworks India are associated (or correlated) with Indian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Hotels has no effect on the direction of Radaan Mediaworks i.e., Radaan Mediaworks and Indian Hotels go up and down completely randomly.

Pair Corralation between Radaan Mediaworks and Indian Hotels

Assuming the 90 days trading horizon Radaan Mediaworks India is expected to generate 0.57 times more return on investment than Indian Hotels. However, Radaan Mediaworks India is 1.75 times less risky than Indian Hotels. It trades about 2.9 of its potential returns per unit of risk. The Indian Hotels is currently generating about 0.33 per unit of risk. If you would invest  518.00  in Radaan Mediaworks India on October 1, 2024 and sell it today you would earn a total of  210.00  from holding Radaan Mediaworks India or generate 40.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Radaan Mediaworks India  vs.  The Indian Hotels

Radaan Mediaworks India

Risk-Adjusted Performance

39 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Radaan Mediaworks India are ranked lower than 39 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Radaan Mediaworks sustained solid returns over the last few months and may actually be approaching a breakup point.

Indian Hotels

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Indian Hotels are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Indian Hotels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Radaan Mediaworks and Indian Hotels

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

The idea behind Radaan Mediaworks India and The Indian Hotels 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.