Correlation Between Osia Hyper and Rainbow Childrens

Can any of the company-specific risk be diversified away by investing in both Osia Hyper and Rainbow Childrens 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 Rainbow Childrens 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 Rainbow Childrens Medicare, you can compare the effects of market volatilities on Osia Hyper and Rainbow Childrens 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 Rainbow Childrens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osia Hyper and Rainbow Childrens.

Diversification Opportunities for Osia Hyper and Rainbow Childrens

0.82

Correlation Coefficient

Osia Hyper  Rainbow Childrens

Very poor diversification

The 3 months correlation between Osia and Rainbow is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Osia Hyper Retail and Rainbow Childrens Medicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainbow Childrens 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 Rainbow Childrens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainbow Childrens has no effect on the direction of Osia Hyper i.e., Osia Hyper and Rainbow Childrens go up and down completely randomly.

Pair Corralation between Osia Hyper and Rainbow Childrens

Assuming the 90 days trading horizon Osia Hyper Retail is expected to generate 1.68 times more return on investment than Rainbow Childrens. However, Osia Hyper is 1.68 times more volatile than Rainbow Childrens Medicare. It trades about -0.02 of its potential returns per unit of risk. Rainbow Childrens Medicare is currently generating about -0.09 per unit of risk. If you would invest  2,891  in Osia Hyper Retail on December 27, 2024 and sell it today you would lose (242.00) from holding Osia Hyper Retail or give up 8.37% of portfolio value over 90 days.

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

Osia Hyper Retail  vs.  Rainbow Childrens Medicare

Osia Hyper Retail

Risk-Adjusted Performance

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 relatively invariable basic indicators, Osia Hyper is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Rainbow Childrens

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rainbow Childrens Medicare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Osia Hyper and Rainbow Childrens

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

The idea behind Osia Hyper Retail and Rainbow Childrens Medicare 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.