Correlation Between MAS Financial and Motilal Oswal

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

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

Diversification Opportunities for MAS Financial and Motilal Oswal

0.89

Correlation Coefficient

MAS Financial  Motilal Oswal

Very poor diversification

The 3 months correlation between MAS and Motilal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MAS Financial Services and Motilal Oswal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motilal Oswal Financial and MAS Financial 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 MAS Financial Services are associated (or correlated) with Motilal Oswal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motilal Oswal Financial has no effect on the direction of MAS Financial i.e., MAS Financial and Motilal Oswal go up and down completely randomly.

Pair Corralation between MAS Financial and Motilal Oswal

Assuming the 90 days trading horizon MAS Financial is expected to generate 1.33 times less return on investment than Motilal Oswal. But when comparing it to its historical volatility, MAS Financial Services is 1.38 times less risky than Motilal Oswal. It trades about 0.15 of its potential returns per unit of risk. Motilal Oswal Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  72,900  in Motilal Oswal Financial on April 22, 2025 and sell it today you would earn a total of  20,450  from holding Motilal Oswal Financial or generate 28.05% return on investment over 90 days.

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

MAS Financial Services  vs.  Motilal Oswal Financial

MAS Financial Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Financial Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, MAS Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Motilal Oswal Financial

Risk-Adjusted Performance

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 unsteady basic indicators, Motilal Oswal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAS Financial and Motilal Oswal

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

The idea behind MAS Financial Services and Motilal Oswal Financial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.