Correlation Between Orissa Minerals and Uniinfo Telecom

Can any of the company-specific risk be diversified away by investing in both Orissa Minerals and Uniinfo Telecom 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 Orissa Minerals and Uniinfo Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Orissa Minerals and Uniinfo Telecom Services, you can compare the effects of market volatilities on Orissa Minerals and Uniinfo Telecom 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 Orissa Minerals with a short position of Uniinfo Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orissa Minerals and Uniinfo Telecom.

Diversification Opportunities for Orissa Minerals and Uniinfo Telecom

0.72

Correlation Coefficient

Orissa Minerals  Uniinfo Telecom

Poor diversification

The 3 months correlation between Orissa and Uniinfo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Orissa Minerals and Uniinfo Telecom Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniinfo Telecom Services and Orissa Minerals 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 The Orissa Minerals are associated (or correlated) with Uniinfo Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniinfo Telecom Services has no effect on the direction of Orissa Minerals i.e., Orissa Minerals and Uniinfo Telecom go up and down completely randomly.

Pair Corralation between Orissa Minerals and Uniinfo Telecom

Assuming the 90 days trading horizon The Orissa Minerals is expected to generate 0.87 times more return on investment than Uniinfo Telecom. However, The Orissa Minerals is 1.15 times less risky than Uniinfo Telecom. It trades about 0.0 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about 0.0 per unit of risk. If you would invest  793,925  in The Orissa Minerals on September 4, 2024 and sell it today you would lose (12,675) from holding The Orissa Minerals or give up 1.6% of portfolio value over 90 days.

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

The Orissa Minerals  vs.  Uniinfo Telecom Services

Orissa Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Uniinfo Telecom Services

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Orissa Minerals and Uniinfo Telecom

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

The idea behind The Orissa Minerals and Uniinfo Telecom Services 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.