Correlation Between Diligent Media and Omkar Speciality

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

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

Diversification Opportunities for Diligent Media and Omkar Speciality

-0.45

Correlation Coefficient

Diligent Media  Omkar Speciality

Very good diversification

The 3 months correlation between Diligent and Omkar is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Diligent Media 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 Diligent Media 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 Diligent Media 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 Diligent Media i.e., Diligent Media and Omkar Speciality go up and down completely randomly.

Pair Corralation between Diligent Media and Omkar Speciality

Assuming the 90 days trading horizon Diligent Media is expected to generate 1.19 times more return on investment than Omkar Speciality. However, Diligent Media is 1.19 times more volatile than Omkar Speciality Chemicals. It trades about 0.1 of its potential returns per unit of risk. Omkar Speciality Chemicals is currently generating about -0.05 per unit of risk. If you would invest  508.00  in Diligent Media on October 5, 2024 and sell it today you would earn a total of  104.00  from holding Diligent Media or generate 20.47% return on investment over 90 days.

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

Diligent Media  vs.  Omkar Speciality Chemicals

Diligent Media

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Diligent Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Diligent Media demonstrated 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 latest uncertain performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Diligent Media and Omkar Speciality

The main advantage of trading using opposite Diligent Media and Omkar Speciality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diligent Media 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 Diligent Media 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.