Correlation Between Television Broadcasts and BII Railway

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

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

Diversification Opportunities for Television Broadcasts and BII Railway

0.53

Correlation Coefficient

Television Broadcasts  BII Railway

Very weak diversification

The 3 months correlation between Television and BII is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Television Broadcasts Limited and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor and Television Broadcasts 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 Television Broadcasts Limited are associated (or correlated) with BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of Television Broadcasts i.e., Television Broadcasts and BII Railway go up and down completely randomly.

Pair Corralation between Television Broadcasts and BII Railway

Assuming the 90 days trading horizon Television Broadcasts Limited is expected to generate 1.45 times more return on investment than BII Railway. However, Television Broadcasts is 1.45 times more volatile than BII Railway Transportation. It trades about 0.2 of its potential returns per unit of risk. BII Railway Transportation is currently generating about 0.12 per unit of risk. If you would invest  33.00  in Television Broadcasts Limited on April 25, 2025 and sell it today you would earn a total of  13.00  from holding Television Broadcasts Limited or generate 39.39% return on investment over 90 days.

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

Television Broadcasts Limited  vs.  BII Railway Transportation

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 16 (%) 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.

BII Railway Transpor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BII Railway Transportation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BII Railway reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Television Broadcasts and BII Railway

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

The idea behind Television Broadcasts Limited and BII Railway Transportation 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.