Correlation Between Osia Hyper and Viceroy Hotels

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

Diversification Opportunities for Osia Hyper and Viceroy Hotels

0.26

Correlation Coefficient

Osia Hyper  Viceroy Hotels

Modest diversification

The 3 months correlation between Osia and Viceroy is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Osia Hyper Retail and Viceroy Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viceroy Hotels 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 Viceroy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viceroy Hotels has no effect on the direction of Osia Hyper i.e., Osia Hyper and Viceroy Hotels go up and down completely randomly.

Pair Corralation between Osia Hyper and Viceroy Hotels

Assuming the 90 days trading horizon Osia Hyper is expected to generate 5.1 times less return on investment than Viceroy Hotels. But when comparing it to its historical volatility, Osia Hyper Retail is 1.19 times less risky than Viceroy Hotels. It trades about 0.02 of its potential returns per unit of risk. Viceroy Hotels Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  11,402  in Viceroy Hotels Limited on September 2, 2024 and sell it today you would earn a total of  1,593  from holding Viceroy Hotels Limited or generate 13.97% return on investment over 90 days.

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

Osia Hyper Retail  vs.  Viceroy Hotels Limited

Osia Hyper Retail

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Osia Hyper Retail are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Osia Hyper is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Viceroy Hotels

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viceroy Hotels Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Viceroy Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osia Hyper and Viceroy Hotels

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

The idea behind Osia Hyper Retail and Viceroy Hotels 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.