Correlation Between Network18 Media and General Insurance

Can any of the company-specific risk be diversified away by investing in both Network18 Media and General Insurance 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 Network18 Media and General Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network18 Media Investments and General Insurance, you can compare the effects of market volatilities on Network18 Media and General Insurance 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 Network18 Media with a short position of General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network18 Media and General Insurance.

Diversification Opportunities for Network18 Media and General Insurance

-0.72

Correlation Coefficient

Network18 Media  General Insurance

Pay attention - limited upside

The 3 months correlation between Network18 and General is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and Network18 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 Network18 Media Investments are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Network18 Media i.e., Network18 Media and General Insurance go up and down completely randomly.

Pair Corralation between Network18 Media and General Insurance

Assuming the 90 days trading horizon Network18 Media Investments is expected to generate 2.09 times more return on investment than General Insurance. However, Network18 Media is 2.09 times more volatile than General Insurance. It trades about 0.15 of its potential returns per unit of risk. General Insurance is currently generating about -0.1 per unit of risk. If you would invest  4,579  in Network18 Media Investments on April 22, 2025 and sell it today you would earn a total of  1,544  from holding Network18 Media Investments or generate 33.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Network18 Media Investments  vs.  General Insurance

Network18 Media Inve

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Network18 Media Investments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, Network18 Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

General Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Network18 Media and General Insurance

The main advantage of trading using opposite Network18 Media and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network18 Media position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.

The idea behind Network18 Media Investments and General Insurance 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.