Correlation Between Motilal Oswal and Hybrid Financial

Can any of the company-specific risk be diversified away by investing in both Motilal Oswal and Hybrid Financial 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 Motilal Oswal and Hybrid Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Motilal Oswal Financial and Hybrid Financial Services, you can compare the effects of market volatilities on Motilal Oswal and Hybrid Financial 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 Motilal Oswal with a short position of Hybrid Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motilal Oswal and Hybrid Financial.

Diversification Opportunities for Motilal Oswal and Hybrid Financial

0.47

Correlation Coefficient

Motilal Oswal  Hybrid Financial

Very weak diversification

The 3 months correlation between Motilal and Hybrid is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Motilal Oswal Financial and Hybrid Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hybrid Financial Services and Motilal Oswal 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 Motilal Oswal Financial are associated (or correlated) with Hybrid Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hybrid Financial Services has no effect on the direction of Motilal Oswal i.e., Motilal Oswal and Hybrid Financial go up and down completely randomly.

Pair Corralation between Motilal Oswal and Hybrid Financial

Assuming the 90 days trading horizon Motilal Oswal Financial is expected to under-perform the Hybrid Financial. In addition to that, Motilal Oswal is 1.16 times more volatile than Hybrid Financial Services. It trades about -0.21 of its total potential returns per unit of risk. Hybrid Financial Services is currently generating about -0.03 per unit of volatility. If you would invest  1,280  in Hybrid Financial Services on December 1, 2024 and sell it today you would lose (92.00) from holding Hybrid Financial Services or give up 7.19% of portfolio value over 90 days.

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

Motilal Oswal Financial  vs.  Hybrid Financial Services

Motilal Oswal Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Motilal Oswal Financial 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 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.

Hybrid Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hybrid Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Hybrid Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Motilal Oswal and Hybrid Financial

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

The idea behind Motilal Oswal Financial and Hybrid Financial Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.