Correlation Between MRF and OnMobile Global

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

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

Diversification Opportunities for MRF and OnMobile Global

0.35

Correlation Coefficient

MRF  OnMobile Global

Weak diversification

The 3 months correlation between MRF and OnMobile is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited and OnMobile Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OnMobile Global and MRF 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 MRF Limited 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 MRF i.e., MRF and OnMobile Global go up and down completely randomly.

Pair Corralation between MRF and OnMobile Global

Assuming the 90 days trading horizon MRF Limited is expected to generate 0.38 times more return on investment than OnMobile Global. However, MRF Limited is 2.64 times less risky than OnMobile Global. It trades about 0.04 of its potential returns per unit of risk. OnMobile Global Limited is currently generating about 0.0 per unit of risk. If you would invest  9,252,387  in MRF Limited on October 24, 2024 and sell it today you would earn a total of  1,907,613  from holding MRF Limited or generate 20.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

MRF Limited  vs.  OnMobile Global Limited

MRF Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MRF Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

OnMobile Global

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with MRF and OnMobile Global

The main advantage of trading using opposite MRF and OnMobile Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF 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 MRF Limited 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.