Correlation Between Garuda Construction and Omkar Speciality

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

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

Diversification Opportunities for Garuda Construction and Omkar Speciality

-0.4

Correlation Coefficient

Garuda Construction  Omkar Speciality

Very good diversification

The 3 months correlation between Garuda and Omkar is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Construction Engineerin 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 Garuda Construction 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 Garuda Construction Engineering 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 Garuda Construction i.e., Garuda Construction and Omkar Speciality go up and down completely randomly.

Pair Corralation between Garuda Construction and Omkar Speciality

Assuming the 90 days trading horizon Garuda Construction Engineering is expected to under-perform the Omkar Speciality. In addition to that, Garuda Construction is 1.44 times more volatile than Omkar Speciality Chemicals. It trades about -0.01 of its total potential returns per unit of risk. Omkar Speciality Chemicals is currently generating about 0.04 per unit of volatility. If you would invest  791.00  in Omkar Speciality Chemicals on September 12, 2024 and sell it today you would earn a total of  42.00  from holding Omkar Speciality Chemicals or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	64.52%
Values	Daily Returns

Garuda Construction Engineerin  vs.  Omkar Speciality Chemicals

Garuda Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Garuda Construction Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Garuda Construction is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Omkar Speciality Che

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Omkar Speciality Chemicals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Omkar Speciality may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Garuda Construction and Omkar Speciality

The main advantage of trading using opposite Garuda Construction and Omkar Speciality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Construction 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 Garuda Construction Engineering 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.