Correlation Between Newgen Software and Osia Hyper

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

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

Diversification Opportunities for Newgen Software and Osia Hyper

0.64

Correlation Coefficient

Newgen Software  Osia Hyper

Poor diversification

The 3 months correlation between Newgen and Osia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Newgen Software Technologies 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 Newgen Software 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 Newgen Software Technologies 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 Newgen Software i.e., Newgen Software and Osia Hyper go up and down completely randomly.

Pair Corralation between Newgen Software and Osia Hyper

Assuming the 90 days trading horizon Newgen Software Technologies is expected to generate 1.4 times more return on investment than Osia Hyper. However, Newgen Software is 1.4 times more volatile than Osia Hyper Retail. It trades about 0.04 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about -0.01 per unit of risk. If you would invest  108,000  in Newgen Software Technologies on August 31, 2024 and sell it today you would earn a total of  5,005  from holding Newgen Software Technologies or generate 4.63% return on investment over 90 days.

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

Newgen Software Technologies  vs.  Osia Hyper Retail

Newgen Software Tech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Newgen Software Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Newgen Software may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 relatively invariable basic indicators, Osia Hyper is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Newgen Software and Osia Hyper

The main advantage of trading using opposite Newgen Software and Osia Hyper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newgen Software 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 Newgen Software Technologies 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.