Correlation Between MSP Steel and Osia Hyper

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

By analyzing existing cross correlation between MSP Steel Power and Osia Hyper Retail, you can compare the effects of market volatilities on MSP Steel and Osia Hyper 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 MSP Steel with a short position of Osia Hyper. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSP Steel and Osia Hyper.

Diversification Opportunities for MSP Steel and Osia Hyper

0.22

Correlation Coefficient

MSP Steel  Osia Hyper

Modest diversification

The 3 months correlation between MSP and Osia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MSP Steel Power and Osia Hyper Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osia Hyper Retail and MSP Steel 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 MSP Steel Power are associated (or correlated) with Osia Hyper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osia Hyper Retail has no effect on the direction of MSP Steel i.e., MSP Steel and Osia Hyper go up and down completely randomly.

Pair Corralation between MSP Steel and Osia Hyper

Assuming the 90 days trading horizon MSP Steel Power is expected to generate 1.0 times more return on investment than Osia Hyper. However, MSP Steel Power is 1.0 times less risky than Osia Hyper. It trades about 0.07 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about -0.09 per unit of risk. If you would invest  2,485  in MSP Steel Power on October 14, 2024 and sell it today you would earn a total of  1,292  from holding MSP Steel Power or generate 51.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.18%
Values	Daily Returns

MSP Steel Power  vs.  Osia Hyper Retail

MSP Steel Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MSP Steel Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with MSP Steel and Osia Hyper

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

The idea behind MSP Steel Power and Osia Hyper Retail 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.