Correlation Between Asian Hotels and Omkar Speciality

Can any of the company-specific risk be diversified away by investing in both Asian Hotels and Omkar Speciality 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 Asian Hotels and Omkar Speciality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asian Hotels Limited and Omkar Speciality Chemicals, you can compare the effects of market volatilities on Asian Hotels and Omkar Speciality 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 Asian Hotels with a short position of Omkar Speciality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Hotels and Omkar Speciality.

Diversification Opportunities for Asian Hotels and Omkar Speciality

0.31

Correlation Coefficient

Asian Hotels  Omkar Speciality

Weak diversification

The 3 months correlation between Asian and Omkar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asian Hotels Limited and Omkar Speciality Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omkar Speciality Che and Asian Hotels 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 Asian Hotels Limited are associated (or correlated) with Omkar Speciality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omkar Speciality Che has no effect on the direction of Asian Hotels i.e., Asian Hotels and Omkar Speciality go up and down completely randomly.

Pair Corralation between Asian Hotels and Omkar Speciality

Assuming the 90 days trading horizon Asian Hotels Limited is expected to generate 0.92 times more return on investment than Omkar Speciality. However, Asian Hotels Limited is 1.09 times less risky than Omkar Speciality. It trades about 0.09 of its potential returns per unit of risk. Omkar Speciality Chemicals is currently generating about -0.03 per unit of risk. If you would invest  18,332  in Asian Hotels Limited on September 4, 2024 and sell it today you would earn a total of  2,672  from holding Asian Hotels Limited or generate 14.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Asian Hotels Limited  vs.  Omkar Speciality Chemicals

Asian Hotels Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asian Hotels Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Asian Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Omkar Speciality Che

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omkar Speciality Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Omkar Speciality is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Asian Hotels and Omkar Speciality

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

The idea behind Asian Hotels Limited and Omkar Speciality Chemicals 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.