Correlation Between OnMobile Global and Tata Steel

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

Diversification Opportunities for OnMobile Global and Tata Steel

0.7

Correlation Coefficient

OnMobile Global  Tata Steel

Poor diversification

The 3 months correlation between OnMobile and Tata is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding OnMobile Global Limited and Tata Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Steel Limited 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 Tata Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Steel Limited has no effect on the direction of OnMobile Global i.e., OnMobile Global and Tata Steel go up and down completely randomly.

Pair Corralation between OnMobile Global and Tata Steel

Assuming the 90 days trading horizon OnMobile Global Limited is expected to generate 2.42 times more return on investment than Tata Steel. However, OnMobile Global is 2.42 times more volatile than Tata Steel Limited. It trades about -0.03 of its potential returns per unit of risk. Tata Steel Limited is currently generating about -0.19 per unit of risk. If you would invest  7,843  in OnMobile Global Limited on October 9, 2024 and sell it today you would lose (750.00) from holding OnMobile Global Limited or give up 9.56% of portfolio value over 90 days.

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

OnMobile Global Limited  vs.  Tata Steel Limited

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 unfluctuating 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.

Tata Steel Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tata Steel Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with OnMobile Global and Tata Steel

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

The idea behind OnMobile Global Limited and Tata Steel 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.