Correlation Between Osia Hyper and Nippon Life

Can any of the company-specific risk be diversified away by investing in both Osia Hyper and Nippon Life 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 Osia Hyper and Nippon Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Osia Hyper Retail and Nippon Life India, you can compare the effects of market volatilities on Osia Hyper and Nippon Life 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 Osia Hyper with a short position of Nippon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osia Hyper and Nippon Life.

Diversification Opportunities for Osia Hyper and Nippon Life

-0.2

Correlation Coefficient

Osia Hyper  Nippon Life

Good diversification

The 3 months correlation between Osia and Nippon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Osia Hyper Retail and Nippon Life India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Life India and Osia Hyper 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 Osia Hyper Retail are associated (or correlated) with Nippon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Life India has no effect on the direction of Osia Hyper i.e., Osia Hyper and Nippon Life go up and down completely randomly.

Pair Corralation between Osia Hyper and Nippon Life

Assuming the 90 days trading horizon Osia Hyper Retail is expected to under-perform the Nippon Life. In addition to that, Osia Hyper is 1.01 times more volatile than Nippon Life India. It trades about -0.24 of its total potential returns per unit of risk. Nippon Life India is currently generating about 0.11 per unit of volatility. If you would invest  65,190  in Nippon Life India on October 4, 2024 and sell it today you would earn a total of  10,595  from holding Nippon Life India or generate 16.25% return on investment over 90 days.

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

Osia Hyper Retail  vs.  Nippon Life India

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Nippon Life India

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nippon Life India are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Nippon Life exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osia Hyper and Nippon Life

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

The idea behind Osia Hyper Retail and Nippon Life India 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.