Correlation Between Honeywell Automation and OnMobile Global

Can any of the company-specific risk be diversified away by investing in both Honeywell Automation and OnMobile Global 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 Honeywell Automation and OnMobile Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Honeywell Automation India and OnMobile Global Limited, you can compare the effects of market volatilities on Honeywell Automation and OnMobile Global 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 Honeywell Automation with a short position of OnMobile Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell Automation and OnMobile Global.

Diversification Opportunities for Honeywell Automation and OnMobile Global

0.91

Correlation Coefficient

Honeywell Automation  OnMobile Global

Almost no diversification

The 3 months correlation between Honeywell and OnMobile is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell Automation India and OnMobile Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OnMobile Global and Honeywell Automation 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 Honeywell Automation India are associated (or correlated) with OnMobile Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OnMobile Global has no effect on the direction of Honeywell Automation i.e., Honeywell Automation and OnMobile Global go up and down completely randomly.

Pair Corralation between Honeywell Automation and OnMobile Global

Assuming the 90 days trading horizon Honeywell Automation India is expected to generate 0.49 times more return on investment than OnMobile Global. However, Honeywell Automation India is 2.05 times less risky than OnMobile Global. It trades about -0.17 of its potential returns per unit of risk. OnMobile Global Limited is currently generating about -0.13 per unit of risk. If you would invest  4,153,745  in Honeywell Automation India on December 28, 2024 and sell it today you would lose (772,295) from holding Honeywell Automation India or give up 18.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Honeywell Automation India  vs.  OnMobile Global Limited

Honeywell Automation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Honeywell Automation India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

OnMobile Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days OnMobile Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Honeywell Automation and OnMobile Global

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

The idea behind Honeywell Automation India and OnMobile Global 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.