Correlation Between HDFC Life and HT Media

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

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

Diversification Opportunities for HDFC Life and HT Media

0.69

Correlation Coefficient

HDFC Life  HT Media

Poor diversification

The 3 months correlation between HDFC and HTMEDIA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Life Insurance 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 HDFC Life 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 HDFC Life Insurance 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 HDFC Life i.e., HDFC Life and HT Media go up and down completely randomly.

Pair Corralation between HDFC Life and HT Media

Assuming the 90 days trading horizon HDFC Life is expected to generate 4.46 times less return on investment than HT Media. But when comparing it to its historical volatility, HDFC Life Insurance is 2.55 times less risky than HT Media. It trades about 0.1 of its potential returns per unit of risk. HT Media Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,750  in HT Media Limited on April 23, 2025 and sell it today you would earn a total of  673.00  from holding HT Media Limited or generate 38.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

HDFC Life Insurance  vs.  HT Media Limited

HDFC Life Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HDFC Life Insurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, HDFC Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, HT Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HDFC Life and HT Media

The main advantage of trading using opposite HDFC Life and HT Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HDFC Life 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 HDFC Life Insurance 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.