Correlation Between Consolidated Construction and India Glycols
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By analyzing existing cross correlation between Consolidated Construction Consortium and India Glycols Limited, you can compare the effects of market volatilities on Consolidated Construction and India Glycols 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 Consolidated Construction with a short position of India Glycols. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Construction and India Glycols.
Diversification Opportunities for Consolidated Construction and India Glycols
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Consolidated and India is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Construction Cons and India Glycols Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Glycols Limited and Consolidated Construction 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 Consolidated Construction Consortium are associated (or correlated) with India Glycols. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Glycols Limited has no effect on the direction of Consolidated Construction i.e., Consolidated Construction and India Glycols go up and down completely randomly.
Pair Corralation between Consolidated Construction and India Glycols
Assuming the 90 days trading horizon Consolidated Construction Consortium is expected to generate 14.44 times more return on investment than India Glycols. However, Consolidated Construction is 14.44 times more volatile than India Glycols Limited. It trades about 0.07 of its potential returns per unit of risk. India Glycols Limited is currently generating about 0.09 per unit of risk. If you would invest 150.00 in Consolidated Construction Consortium on September 1, 2024 and sell it today you would earn a total of 1,745 from holding Consolidated Construction Consortium or generate 1163.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Consolidated Construction Cons vs. India Glycols Limited
Performance |
| Timeline |
| Consolidated Construction |
| India Glycols Limited |
Consolidated Construction and India Glycols Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Construction and India Glycols
The main advantage of trading using opposite Consolidated Construction and India Glycols positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Construction position performs unexpectedly, India Glycols 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 India Glycols will offset losses from the drop in India Glycols' long position.The idea behind Consolidated Construction Consortium and India Glycols Limited 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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