Correlation Between Cartrade Tech and OnMobile Global

Can any of the company-specific risk be diversified away by investing in both Cartrade Tech and OnMobile Global 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 Cartrade Tech and OnMobile Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cartrade Tech Limited and OnMobile Global Limited, you can compare the effects of market volatilities on Cartrade Tech and OnMobile Global 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 Cartrade Tech with a short position of OnMobile Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartrade Tech and OnMobile Global.

Diversification Opportunities for Cartrade Tech and OnMobile Global

-0.48

Correlation Coefficient

Cartrade Tech  OnMobile Global

Very good diversification

The 3 months correlation between Cartrade and OnMobile is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cartrade Tech Limited and OnMobile Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OnMobile Global and Cartrade Tech 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 Cartrade Tech Limited are associated (or correlated) with OnMobile Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OnMobile Global has no effect on the direction of Cartrade Tech i.e., Cartrade Tech and OnMobile Global go up and down completely randomly.

Pair Corralation between Cartrade Tech and OnMobile Global

Assuming the 90 days trading horizon Cartrade Tech Limited is expected to generate 0.96 times more return on investment than OnMobile Global. However, Cartrade Tech Limited is 1.04 times less risky than OnMobile Global. It trades about 0.24 of its potential returns per unit of risk. OnMobile Global Limited is currently generating about -0.06 per unit of risk. If you would invest  96,540  in Cartrade Tech Limited on September 17, 2024 and sell it today you would earn a total of  53,935  from holding Cartrade Tech Limited or generate 55.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Cartrade Tech Limited  vs.  OnMobile Global Limited

Cartrade Tech Limited

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cartrade Tech Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Cartrade Tech exhibited solid returns over the last few months and may actually be approaching a breakup point.

OnMobile Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OnMobile Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cartrade Tech and OnMobile Global

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

The idea behind Cartrade Tech Limited and OnMobile Global 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..