Correlation Between OnMobile Global and Jindal Steel

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

Diversification Opportunities for OnMobile Global and Jindal Steel

0.35

Correlation Coefficient

OnMobile Global  Jindal Steel

Weak diversification

The 3 months correlation between OnMobile and Jindal is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding OnMobile Global Limited and Jindal Steel Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Steel Power 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 Jindal Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Steel Power has no effect on the direction of OnMobile Global i.e., OnMobile Global and Jindal Steel go up and down completely randomly.

Pair Corralation between OnMobile Global and Jindal Steel

Assuming the 90 days trading horizon OnMobile Global Limited is expected to under-perform the Jindal Steel. In addition to that, OnMobile Global is 1.69 times more volatile than Jindal Steel Power. It trades about 0.0 of its total potential returns per unit of risk. Jindal Steel Power is currently generating about 0.06 per unit of volatility. If you would invest  59,789  in Jindal Steel Power on October 9, 2024 and sell it today you would earn a total of  34,146  from holding Jindal Steel Power or generate 57.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

OnMobile Global Limited  vs.  Jindal Steel Power

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 unsteady 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.

Jindal Steel Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jindal Steel Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Jindal Steel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with OnMobile Global and Jindal Steel

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

The idea behind OnMobile Global Limited and Jindal Steel Power 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.