Correlation Between Entertainment Network and Prime Focus
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By analyzing existing cross correlation between Entertainment Network Limited and Prime Focus Limited, you can compare the effects of market volatilities on Entertainment Network and Prime Focus 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 Entertainment Network with a short position of Prime Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entertainment Network and Prime Focus.
Diversification Opportunities for Entertainment Network and Prime Focus
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entertainment and Prime is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Entertainment Network Limited and Prime Focus Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Focus Limited and Entertainment Network 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 Entertainment Network Limited are associated (or correlated) with Prime Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Focus Limited has no effect on the direction of Entertainment Network i.e., Entertainment Network and Prime Focus go up and down completely randomly.
Pair Corralation between Entertainment Network and Prime Focus
Assuming the 90 days trading horizon Entertainment Network is expected to generate 3.08 times less return on investment than Prime Focus. But when comparing it to its historical volatility, Entertainment Network Limited is 1.06 times less risky than Prime Focus. It trades about 0.02 of its potential returns per unit of risk. Prime Focus Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,280 in Prime Focus Limited on September 21, 2024 and sell it today you would earn a total of 4,008 from holding Prime Focus Limited or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.3% |
| Values | Daily Returns |
Entertainment Network Limited vs. Prime Focus Limited
Performance |
| Timeline |
| Entertainment Network |
| Prime Focus Limited |
Entertainment Network and Prime Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entertainment Network and Prime Focus
The main advantage of trading using opposite Entertainment Network and Prime Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entertainment Network position performs unexpectedly, Prime Focus 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 Prime Focus will offset losses from the drop in Prime Focus' long position.The idea behind Entertainment Network Limited and Prime Focus 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.
| Prime Focus vs. Shemaroo Entertainment Limited | Prime Focus vs. Entertainment Network Limited | Prime Focus vs. Cyber Media Research | Prime Focus vs. Next Mediaworks Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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