Correlation Between Karur Vysya and Entertainment Network

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

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

Diversification Opportunities for Karur Vysya and Entertainment Network

0.5

Correlation Coefficient

Karur Vysya  Entertainment Network

Very weak diversification

The 3 months correlation between Karur and Entertainment is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Karur Vysya Bank and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network and Karur Vysya 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 Karur Vysya Bank are associated (or correlated) with Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of Karur Vysya i.e., Karur Vysya and Entertainment Network go up and down completely randomly.

Pair Corralation between Karur Vysya and Entertainment Network

Assuming the 90 days trading horizon Karur Vysya Bank is expected to generate 0.94 times more return on investment than Entertainment Network. However, Karur Vysya Bank is 1.06 times less risky than Entertainment Network. It trades about 0.14 of its potential returns per unit of risk. Entertainment Network Limited is currently generating about 0.12 per unit of risk. If you would invest  21,380  in Karur Vysya Bank on March 29, 2025 and sell it today you would earn a total of  3,602  from holding Karur Vysya Bank or generate 16.85% return on investment over 90 days.

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

Karur Vysya Bank  vs.  Entertainment Network Limited

Karur Vysya Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Karur Vysya Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Karur Vysya showed solid returns over the last few months and may actually be approaching a breakup point.

Entertainment Network

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Entertainment Network Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Entertainment Network unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Karur Vysya and Entertainment Network

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

The idea behind Karur Vysya Bank and Entertainment Network 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.