Correlation Between Imagicaaworld Entertainment and Next Mediaworks

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

By analyzing existing cross correlation between Imagicaaworld Entertainment Limited and Next Mediaworks Limited, you can compare the effects of market volatilities on Imagicaaworld Entertainment and Next Mediaworks 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 Imagicaaworld Entertainment with a short position of Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagicaaworld Entertainment and Next Mediaworks.

Diversification Opportunities for Imagicaaworld Entertainment and Next Mediaworks

-0.2

Correlation Coefficient

Imagicaaworld Entertainment  Next Mediaworks

Good diversification

The 3 months correlation between Imagicaaworld and Next is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Imagicaaworld Entertainment Li and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment Limited are associated (or correlated) with Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Imagicaaworld Entertainment i.e., Imagicaaworld Entertainment and Next Mediaworks go up and down completely randomly.

Pair Corralation between Imagicaaworld Entertainment and Next Mediaworks

Assuming the 90 days trading horizon Imagicaaworld Entertainment Limited is expected to generate 1.4 times more return on investment than Next Mediaworks. However, Imagicaaworld Entertainment is 1.4 times more volatile than Next Mediaworks Limited. It trades about 0.03 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about -0.09 per unit of risk. If you would invest  6,547  in Imagicaaworld Entertainment Limited on April 25, 2025 and sell it today you would earn a total of  152.00  from holding Imagicaaworld Entertainment Limited or generate 2.32% return on investment over 90 days.

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

Imagicaaworld Entertainment Li  vs.  Next Mediaworks Limited

Imagicaaworld Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Imagicaaworld Entertainment Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Imagicaaworld Entertainment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Next Mediaworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Next Mediaworks Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Imagicaaworld Entertainment and Next Mediaworks

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

The idea behind Imagicaaworld Entertainment Limited and Next Mediaworks 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.