Correlation Between Sunflag Iron and Omkar Speciality

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

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

Diversification Opportunities for Sunflag Iron and Omkar Speciality

-0.4

Correlation Coefficient

Sunflag Iron  Omkar Speciality

Very good diversification

The 3 months correlation between Sunflag and Omkar is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sunflag Iron And 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 Sunflag Iron 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 Sunflag Iron And 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 Sunflag Iron i.e., Sunflag Iron and Omkar Speciality go up and down completely randomly.

Pair Corralation between Sunflag Iron and Omkar Speciality

Assuming the 90 days trading horizon Sunflag Iron is expected to generate 1.02 times less return on investment than Omkar Speciality. In addition to that, Sunflag Iron is 1.16 times more volatile than Omkar Speciality Chemicals. It trades about 0.18 of its total potential returns per unit of risk. Omkar Speciality Chemicals is currently generating about 0.22 per unit of volatility. If you would invest  833.00  in Omkar Speciality Chemicals on October 12, 2024 and sell it today you would earn a total of  118.00  from holding Omkar Speciality Chemicals or generate 14.17% return on investment over 90 days.

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

Sunflag Iron And  vs.  Omkar Speciality Chemicals

Sunflag Iron And

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunflag Iron And are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Sunflag Iron reported 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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sunflag Iron and Omkar Speciality

The main advantage of trading using opposite Sunflag Iron and Omkar Speciality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunflag Iron 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 Sunflag Iron And 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.