Correlation Between Datamatics Global and Indian Oil

Can any of the company-specific risk be diversified away by investing in both Datamatics Global and Indian Oil 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 Datamatics Global and Indian Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Datamatics Global and Indian Oil

0.15

Correlation Coefficient

Datamatics Global  Indian Oil

Average diversification

The 3 months correlation between Datamatics and Indian is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Datamatics Global Services and Indian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Oil and Datamatics Global 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 Datamatics Global Services are associated (or correlated) with Indian Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Oil has no effect on the direction of Datamatics Global i.e., Datamatics Global and Indian Oil go up and down completely randomly.

Pair Corralation between Datamatics Global and Indian Oil

Assuming the 90 days trading horizon Datamatics Global Services is expected to generate 2.52 times more return on investment than Indian Oil. However, Datamatics Global is 2.52 times more volatile than Indian Oil. It trades about 0.19 of its potential returns per unit of risk. Indian Oil is currently generating about 0.01 per unit of risk. If you would invest  61,685  in Datamatics Global Services on May 21, 2025 and sell it today you would earn a total of  23,980  from holding Datamatics Global Services or generate 38.87% return on investment over 90 days.

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

Datamatics Global Services  vs.  Indian Oil

Datamatics Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Indian Oil

Risk-Adjusted Performance

Weak

Over the last 90 days Indian Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Indian Oil is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Datamatics Global and Indian Oil

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

The idea behind Datamatics Global Services and Indian Oil 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.