Correlation Between Omkar Speciality and Kalyani Steels

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

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

Diversification Opportunities for Omkar Speciality and Kalyani Steels

-0.53

Correlation Coefficient

Omkar Speciality  Kalyani Steels

Excellent diversification

The 3 months correlation between Omkar and Kalyani is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Omkar Speciality Chemicals and Kalyani Steels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Steels and Omkar Speciality 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 Omkar Speciality Chemicals are associated (or correlated) with Kalyani Steels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Steels has no effect on the direction of Omkar Speciality i.e., Omkar Speciality and Kalyani Steels go up and down completely randomly.

Pair Corralation between Omkar Speciality and Kalyani Steels

Assuming the 90 days trading horizon Omkar Speciality Chemicals is expected to under-perform the Kalyani Steels. But the stock apears to be less risky and, when comparing its historical volatility, Omkar Speciality Chemicals is 1.12 times less risky than Kalyani Steels. The stock trades about -0.06 of its potential returns per unit of risk. The Kalyani Steels Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  85,680  in Kalyani Steels Limited on October 1, 2024 and sell it today you would earn a total of  29,035  from holding Kalyani Steels Limited or generate 33.89% return on investment over 90 days.

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

Omkar Speciality Chemicals  vs.  Kalyani Steels Limited

Omkar Speciality Che

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omkar Speciality Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Kalyani Steels

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Steels Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Kalyani Steels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omkar Speciality and Kalyani Steels

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

The idea behind Omkar Speciality Chemicals and Kalyani Steels 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.