Correlation Between Motilal Oswal and MAS Financial

Can any of the company-specific risk be diversified away by investing in both Motilal Oswal and MAS Financial 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 Motilal Oswal and MAS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Motilal Oswal Financial and MAS Financial Services, you can compare the effects of market volatilities on Motilal Oswal and MAS Financial 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 Motilal Oswal with a short position of MAS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motilal Oswal and MAS Financial.

Diversification Opportunities for Motilal Oswal and MAS Financial

-0.04

Correlation Coefficient

Motilal Oswal  MAS Financial

Good diversification

The 3 months correlation between Motilal and MAS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Motilal Oswal Financial and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services and Motilal Oswal 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 Motilal Oswal Financial are associated (or correlated) with MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of Motilal Oswal i.e., Motilal Oswal and MAS Financial go up and down completely randomly.

Pair Corralation between Motilal Oswal and MAS Financial

Assuming the 90 days trading horizon Motilal Oswal Financial is expected to generate 1.97 times more return on investment than MAS Financial. However, Motilal Oswal is 1.97 times more volatile than MAS Financial Services. It trades about 0.15 of its potential returns per unit of risk. MAS Financial Services is currently generating about 0.0 per unit of risk. If you would invest  74,200  in Motilal Oswal Financial on September 12, 2024 and sell it today you would earn a total of  23,455  from holding Motilal Oswal Financial or generate 31.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Motilal Oswal Financial  vs.  MAS Financial Services

Motilal Oswal Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Motilal Oswal Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Motilal Oswal disclosed solid returns over the last few months and may actually be approaching a breakup point.

MAS Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAS Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, MAS Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Motilal Oswal and MAS Financial

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

The idea behind Motilal Oswal Financial and MAS Financial Services 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.