Correlation Between CSB Bank and Osia Hyper

Can any of the company-specific risk be diversified away by investing in both CSB Bank and Osia Hyper 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 CSB Bank and Osia Hyper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSB Bank Limited and Osia Hyper Retail, you can compare the effects of market volatilities on CSB Bank and Osia Hyper 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 CSB Bank with a short position of Osia Hyper. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSB Bank and Osia Hyper.

Diversification Opportunities for CSB Bank and Osia Hyper

0.35

Correlation Coefficient

CSB Bank  Osia Hyper

Weak diversification

The 3 months correlation between CSB and Osia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CSB Bank Limited and Osia Hyper Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osia Hyper Retail and CSB Bank 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 CSB Bank Limited are associated (or correlated) with Osia Hyper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osia Hyper Retail has no effect on the direction of CSB Bank i.e., CSB Bank and Osia Hyper go up and down completely randomly.

Pair Corralation between CSB Bank and Osia Hyper

Assuming the 90 days trading horizon CSB Bank is expected to generate 1.02 times less return on investment than Osia Hyper. But when comparing it to its historical volatility, CSB Bank Limited is 1.46 times less risky than Osia Hyper. It trades about 0.06 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,022  in Osia Hyper Retail on September 22, 2024 and sell it today you would earn a total of  52.00  from holding Osia Hyper Retail or generate 1.72% return on investment over 90 days.

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

CSB Bank Limited  vs.  Osia Hyper Retail

CSB Bank Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSB Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CSB Bank is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CSB Bank and Osia Hyper

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

The idea behind CSB Bank Limited and Osia Hyper Retail 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.