Correlation Between Media Times and Gatron Industries
Can any of the company-specific risk be diversified away by investing in both Media Times and Gatron Industries 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 Media Times and Gatron Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Times and Gatron Industries, you can compare the effects of market volatilities on Media Times and Gatron Industries 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 Media Times with a short position of Gatron Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Times and Gatron Industries.
Diversification Opportunities for Media Times and Gatron Industries
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Media and Gatron is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Media Times and Gatron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatron Industries and Media Times 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 Media Times are associated (or correlated) with Gatron Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatron Industries has no effect on the direction of Media Times i.e., Media Times and Gatron Industries go up and down completely randomly.
Pair Corralation between Media Times and Gatron Industries
Assuming the 90 days trading horizon Media Times is expected to generate 5.82 times more return on investment than Gatron Industries. However, Media Times is 5.82 times more volatile than Gatron Industries. It trades about 0.27 of its potential returns per unit of risk. Gatron Industries is currently generating about 0.15 per unit of risk. If you would invest 193.00 in Media Times on September 12, 2024 and sell it today you would earn a total of 74.00 from holding Media Times or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Times vs. Gatron Industries
Performance |
| Timeline |
| Media Times |
| Gatron Industries |
Media Times and Gatron Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Times and Gatron Industries
The main advantage of trading using opposite Media Times and Gatron Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Times position performs unexpectedly, Gatron Industries 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 Gatron Industries will offset losses from the drop in Gatron Industries' long position.| Media Times vs. Masood Textile Mills | Media Times vs. Fauji Foods | Media Times vs. KSB Pumps | Media Times vs. Mari Petroleum |
| Gatron Industries vs. Packages | Gatron Industries vs. Wah Nobel Chemicals | Gatron Industries vs. MCB Investment Manag | Gatron Industries vs. AKD Hospitality |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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