Correlation Between Diligent Media and Garware Hi

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

By analyzing existing cross correlation between Diligent Media and Garware Hi Tech Films, you can compare the effects of market volatilities on Diligent Media and Garware Hi 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 Diligent Media with a short position of Garware Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diligent Media and Garware Hi.

Diversification Opportunities for Diligent Media and Garware Hi

0.63

Correlation Coefficient

Diligent Media  Garware Hi

Poor diversification

The 3 months correlation between Diligent and Garware is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Diligent Media and Garware Hi Tech Films in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garware Hi Tech and Diligent 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 Diligent Media are associated (or correlated) with Garware Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garware Hi Tech has no effect on the direction of Diligent Media i.e., Diligent Media and Garware Hi go up and down completely randomly.

Pair Corralation between Diligent Media and Garware Hi

Assuming the 90 days trading horizon Diligent Media is expected to generate 23.38 times less return on investment than Garware Hi. In addition to that, Diligent Media is 1.02 times more volatile than Garware Hi Tech Films. It trades about 0.0 of its total potential returns per unit of risk. Garware Hi Tech Films is currently generating about 0.07 per unit of volatility. If you would invest  340,790  in Garware Hi Tech Films on April 24, 2025 and sell it today you would earn a total of  30,520  from holding Garware Hi Tech Films or generate 8.96% return on investment over 90 days.

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

Diligent Media  vs.  Garware Hi Tech Films

Diligent Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diligent Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Diligent Media is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Garware Hi Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Garware Hi Tech Films are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Garware Hi may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Diligent Media and Garware Hi

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

The idea behind Diligent Media and Garware Hi Tech Films 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.