Correlation Between Entertainment Network and Omkar Speciality

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

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

Diversification Opportunities for Entertainment Network and Omkar Speciality

-0.02

Correlation Coefficient

Entertainment Network  Omkar Speciality

Good diversification

The 3 months correlation between Entertainment and Omkar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Entertainment Network Limited 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 Entertainment Network 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 Entertainment Network Limited 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 Entertainment Network i.e., Entertainment Network and Omkar Speciality go up and down completely randomly.

Pair Corralation between Entertainment Network and Omkar Speciality

Assuming the 90 days trading horizon Entertainment Network Limited is expected to generate 1.16 times more return on investment than Omkar Speciality. However, Entertainment Network is 1.16 times more volatile than Omkar Speciality Chemicals. It trades about 0.01 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  18,892  in Entertainment Network Limited on September 15, 2024 and sell it today you would lose (274.00) from holding Entertainment Network Limited or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.25%
Values	Daily Returns

Entertainment Network Limited  vs.  Omkar Speciality Chemicals

Entertainment Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entertainment Network Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Omkar Speciality Che

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Omkar Speciality Chemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Entertainment Network and Omkar Speciality

The main advantage of trading using opposite Entertainment Network and Omkar Speciality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entertainment Network 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 Entertainment Network Limited 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.