Correlation Between SUN ART and Television Broadcasts

Can any of the company-specific risk be diversified away by investing in both SUN ART and Television Broadcasts 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 SUN ART and Television Broadcasts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SUN ART RETAIL and Television Broadcasts Limited, you can compare the effects of market volatilities on SUN ART and Television Broadcasts 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 SUN ART with a short position of Television Broadcasts. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and Television Broadcasts.

Diversification Opportunities for SUN ART and Television Broadcasts

0.15

Correlation Coefficient

SUN ART  Television Broadcasts

Average diversification

The 3 months correlation between SUN and Television is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and Television Broadcasts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Television Broadcasts and SUN ART 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 SUN ART RETAIL are associated (or correlated) with Television Broadcasts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Television Broadcasts has no effect on the direction of SUN ART i.e., SUN ART and Television Broadcasts go up and down completely randomly.

Pair Corralation between SUN ART and Television Broadcasts

Assuming the 90 days trading horizon SUN ART is expected to generate 1.48 times less return on investment than Television Broadcasts. In addition to that, SUN ART is 1.34 times more volatile than Television Broadcasts Limited. It trades about 0.11 of its total potential returns per unit of risk. Television Broadcasts Limited is currently generating about 0.22 per unit of volatility. If you would invest  33.00  in Television Broadcasts Limited on April 24, 2025 and sell it today you would earn a total of  14.00  from holding Television Broadcasts Limited or generate 42.42% return on investment over 90 days.

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

SUN ART RETAIL  vs.  Television Broadcasts Limited

SUN ART RETAIL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, SUN ART exhibited solid returns over the last few months and may actually be approaching a breakup point.

Television Broadcasts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Television Broadcasts Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Television Broadcasts unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUN ART and Television Broadcasts

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

The idea behind SUN ART RETAIL and Television Broadcasts 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.