Correlation Between Cambridge Technology and OnMobile Global

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

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

Diversification Opportunities for Cambridge Technology and OnMobile Global

0.17

Correlation Coefficient

Cambridge Technology  OnMobile Global

Average diversification

The 3 months correlation between Cambridge and OnMobile is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Technology Enterpris and OnMobile Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OnMobile Global and Cambridge Technology 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 Cambridge Technology Enterprises 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 Cambridge Technology i.e., Cambridge Technology and OnMobile Global go up and down completely randomly.

Pair Corralation between Cambridge Technology and OnMobile Global

Assuming the 90 days trading horizon Cambridge Technology Enterprises is expected to generate 0.85 times more return on investment than OnMobile Global. However, Cambridge Technology Enterprises is 1.17 times less risky than OnMobile Global. It trades about -0.01 of its potential returns per unit of risk. OnMobile Global Limited is currently generating about -0.08 per unit of risk. If you would invest  10,874  in Cambridge Technology Enterprises on September 29, 2024 and sell it today you would lose (488.00) from holding Cambridge Technology Enterprises or give up 4.49% of portfolio value over 90 days.

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

Cambridge Technology Enterpris  vs.  OnMobile Global Limited

Cambridge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 unfluctuating performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cambridge Technology and OnMobile Global

The main advantage of trading using opposite Cambridge Technology and OnMobile Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Technology 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 Cambridge Technology Enterprises 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.