Correlation Between Styrenix Performance and Omkar Speciality

Can any of the company-specific risk be diversified away by investing in both Styrenix Performance and Omkar Speciality 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 Styrenix Performance and Omkar Speciality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Styrenix Performance Materials and Omkar Speciality Chemicals, you can compare the effects of market volatilities on Styrenix Performance and Omkar Speciality 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 Styrenix Performance with a short position of Omkar Speciality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Styrenix Performance and Omkar Speciality.

Diversification Opportunities for Styrenix Performance and Omkar Speciality

-0.55

Correlation Coefficient

Styrenix Performance  Omkar Speciality

Excellent diversification

The 3 months correlation between Styrenix and Omkar is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Styrenix Performance Materials and Omkar Speciality Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omkar Speciality Che and Styrenix Performance 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 Styrenix Performance Materials are associated (or correlated) with Omkar Speciality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omkar Speciality Che has no effect on the direction of Styrenix Performance i.e., Styrenix Performance and Omkar Speciality go up and down completely randomly.

Pair Corralation between Styrenix Performance and Omkar Speciality

Assuming the 90 days trading horizon Styrenix Performance Materials is expected to generate 0.83 times more return on investment than Omkar Speciality. However, Styrenix Performance Materials is 1.21 times less risky than Omkar Speciality. It trades about 0.16 of its potential returns per unit of risk. Omkar Speciality Chemicals is currently generating about -0.01 per unit of risk. If you would invest  98,305  in Styrenix Performance Materials on October 5, 2024 and sell it today you would earn a total of  197,160  from holding Styrenix Performance Materials or generate 200.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.34%
Values	Daily Returns

Styrenix Performance Materials  vs.  Omkar Speciality Chemicals

Styrenix Performance

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Styrenix Performance Materials are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Styrenix Performance demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Omkar Speciality Che

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omkar Speciality Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Omkar Speciality is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Styrenix Performance and Omkar Speciality

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

The idea behind Styrenix Performance Materials and Omkar Speciality Chemicals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.