Correlation Between OnMobile Global and Maharashtra Seamless

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

Diversification Opportunities for OnMobile Global and Maharashtra Seamless

-0.07

Correlation Coefficient

OnMobile Global  Maharashtra Seamless

Good diversification

The 3 months correlation between OnMobile and Maharashtra is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding OnMobile Global Limited and Maharashtra Seamless Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maharashtra Seamless 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 Maharashtra Seamless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maharashtra Seamless has no effect on the direction of OnMobile Global i.e., OnMobile Global and Maharashtra Seamless go up and down completely randomly.

Pair Corralation between OnMobile Global and Maharashtra Seamless

Assuming the 90 days trading horizon OnMobile Global Limited is expected to under-perform the Maharashtra Seamless. In addition to that, OnMobile Global is 1.45 times more volatile than Maharashtra Seamless Limited. It trades about -0.14 of its total potential returns per unit of risk. Maharashtra Seamless Limited is currently generating about 0.0 per unit of volatility. If you would invest  69,935  in Maharashtra Seamless Limited on December 30, 2024 and sell it today you would lose (1,660) from holding Maharashtra Seamless Limited or give up 2.37% of portfolio value over 90 days.

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

OnMobile Global Limited  vs.  Maharashtra Seamless Limited

OnMobile Global

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Maharashtra Seamless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maharashtra Seamless Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Maharashtra Seamless is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with OnMobile Global and Maharashtra Seamless

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

The idea behind OnMobile Global Limited and Maharashtra Seamless 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.