Correlation Between OnMobile Global and Healthcare Global

Can any of the company-specific risk be diversified away by investing in both OnMobile Global and Healthcare 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 OnMobile Global and Healthcare Global 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 Healthcare Global Enterprises, you can compare the effects of market volatilities on OnMobile Global and Healthcare 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 OnMobile Global with a short position of Healthcare Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of OnMobile Global and Healthcare Global.

Diversification Opportunities for OnMobile Global and Healthcare Global

-0.38

Correlation Coefficient

OnMobile Global  Healthcare Global

Very good diversification

The 3 months correlation between OnMobile and Healthcare is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding OnMobile Global Limited and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global 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 Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of OnMobile Global i.e., OnMobile Global and Healthcare Global go up and down completely randomly.

Pair Corralation between OnMobile Global and Healthcare Global

Assuming the 90 days trading horizon OnMobile Global is expected to generate 37.46 times less return on investment than Healthcare Global. In addition to that, OnMobile Global is 1.43 times more volatile than Healthcare Global Enterprises. It trades about 0.0 of its total potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.09 per unit of volatility. If you would invest  43,180  in Healthcare Global Enterprises on October 7, 2024 and sell it today you would earn a total of  5,050  from holding Healthcare Global Enterprises or generate 11.7% return on investment over 90 days.

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

OnMobile Global Limited  vs.  Healthcare Global Enterprises

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 quite persistent forward indicators, OnMobile Global is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Healthcare Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OnMobile Global and Healthcare Global

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

The idea behind OnMobile Global Limited and Healthcare Global Enterprises 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.