Correlation Between OnMobile Global and Advani Hotels

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

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

Diversification Opportunities for OnMobile Global and Advani Hotels

0.65

Correlation Coefficient

OnMobile Global  Advani Hotels

Poor diversification

The 3 months correlation between OnMobile and Advani is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding OnMobile Global Limited and Advani Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advani Hotels Resorts and OnMobile Global 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 OnMobile Global Limited are associated (or correlated) with Advani Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advani Hotels Resorts has no effect on the direction of OnMobile Global i.e., OnMobile Global and Advani Hotels go up and down completely randomly.

Pair Corralation between OnMobile Global and Advani Hotels

Assuming the 90 days trading horizon OnMobile Global is expected to generate 18.3 times less return on investment than Advani Hotels. But when comparing it to its historical volatility, OnMobile Global Limited is 1.25 times less risky than Advani Hotels. It trades about 0.02 of its potential returns per unit of risk. Advani Hotels Resorts is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  6,500  in Advani Hotels Resorts on September 19, 2024 and sell it today you would earn a total of  633.00  from holding Advani Hotels Resorts or generate 9.74% return on investment over 90 days.

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

OnMobile Global Limited  vs.  Advani Hotels Resorts

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 latest conflicting performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Advani Hotels Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advani Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advani Hotels is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with OnMobile Global and Advani Hotels

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

The idea behind OnMobile Global Limited and Advani Hotels Resorts 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.