Correlation Between Electronics Mart and HT Media

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

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

Diversification Opportunities for Electronics Mart and HT Media

0.12

Correlation Coefficient

Electronics Mart  HT Media

Average diversification

The 3 months correlation between Electronics and HTMEDIA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and HT Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HT Media Limited and Electronics Mart 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 Electronics Mart India are associated (or correlated) with HT Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HT Media Limited has no effect on the direction of Electronics Mart i.e., Electronics Mart and HT Media go up and down completely randomly.

Pair Corralation between Electronics Mart and HT Media

Assuming the 90 days trading horizon Electronics Mart India is expected to under-perform the HT Media. But the stock apears to be less risky and, when comparing its historical volatility, Electronics Mart India is 1.1 times less risky than HT Media. The stock trades about -0.01 of its potential returns per unit of risk. The HT Media Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,767  in HT Media Limited on April 24, 2025 and sell it today you would earn a total of  576.00  from holding HT Media Limited or generate 32.6% return on investment over 90 days.

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

Electronics Mart India  vs.  HT Media Limited

Electronics Mart India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electronics Mart India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Electronics Mart is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

HT Media Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HT Media Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, HT Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electronics Mart and HT Media

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

The idea behind Electronics Mart India and HT Media 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..