Correlation Between Osia Hyper and Federal Bank

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

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

Diversification Opportunities for Osia Hyper and Federal Bank

-0.63

Correlation Coefficient

Osia Hyper  Federal Bank

Excellent diversification

The 3 months correlation between Osia and Federal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Osia Hyper Retail and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank and Osia Hyper 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 Osia Hyper Retail are associated (or correlated) with Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of Osia Hyper i.e., Osia Hyper and Federal Bank go up and down completely randomly.

Pair Corralation between Osia Hyper and Federal Bank

Assuming the 90 days trading horizon Osia Hyper Retail is expected to generate 1.84 times more return on investment than Federal Bank. However, Osia Hyper is 1.84 times more volatile than The Federal Bank. It trades about 0.04 of its potential returns per unit of risk. The Federal Bank is currently generating about -0.24 per unit of risk. 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Osia Hyper Retail  vs.  The Federal Bank

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 weak 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.

Federal Bank

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Federal Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Federal Bank is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Osia Hyper and Federal Bank

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

The idea behind Osia Hyper Retail and The Federal Bank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.