Correlation Between One 97 and Power Finance

Can any of the company-specific risk be diversified away by investing in both One 97 and Power Finance 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 One 97 and Power Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between One 97 Communications and Power Finance, you can compare the effects of market volatilities on One 97 and Power Finance 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 One 97 with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of One 97 and Power Finance.

Diversification Opportunities for One 97 and Power Finance

0.41

Correlation Coefficient

One 97  Power Finance

Very weak diversification

The 3 months correlation between One and Power is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding One 97 Communications and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and One 97 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 One 97 Communications are associated (or correlated) with Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of One 97 i.e., One 97 and Power Finance go up and down completely randomly.

Pair Corralation between One 97 and Power Finance

Assuming the 90 days trading horizon One 97 Communications is expected to generate 0.96 times more return on investment than Power Finance. However, One 97 Communications is 1.04 times less risky than Power Finance. It trades about 0.0 of its potential returns per unit of risk. Power Finance is currently generating about -0.33 per unit of risk. If you would invest  97,195  in One 97 Communications on October 9, 2024 and sell it today you would lose (290.00) from holding One 97 Communications or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

One 97 Communications  vs.  Power Finance

One 97 Communications

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

Power Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Power Finance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with One 97 and Power Finance

The main advantage of trading using opposite One 97 and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 97 position performs unexpectedly, Power Finance 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 Power Finance will offset losses from the drop in Power Finance's long position.

The idea behind One 97 Communications and Power Finance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.