Correlation Between Coal India and Jindal Saw
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By analyzing existing cross correlation between Coal India Limited and Jindal Saw Limited, you can compare the effects of market volatilities on Coal India and Jindal Saw 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 Coal India with a short position of Jindal Saw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coal India and Jindal Saw.
Diversification Opportunities for Coal India and Jindal Saw
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coal and Jindal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Coal India Limited and Jindal Saw Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Saw Limited and Coal India 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 Coal India Limited are associated (or correlated) with Jindal Saw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Saw Limited has no effect on the direction of Coal India i.e., Coal India and Jindal Saw go up and down completely randomly.
Pair Corralation between Coal India and Jindal Saw
Assuming the 90 days trading horizon Coal India Limited is expected to under-perform the Jindal Saw. But the stock apears to be less risky and, when comparing its historical volatility, Coal India Limited is 1.73 times less risky than Jindal Saw. The stock trades about -0.24 of its potential returns per unit of risk. The Jindal Saw Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30,470 in Jindal Saw Limited on August 30, 2024 and sell it today you would earn a total of 190.00 from holding Jindal Saw Limited or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Coal India Limited vs. Jindal Saw Limited
Performance |
| Timeline |
| Coal India Limited |
| Jindal Saw Limited |
Coal India and Jindal Saw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coal India and Jindal Saw
The main advantage of trading using opposite Coal India and Jindal Saw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coal India position performs unexpectedly, Jindal Saw 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 Jindal Saw will offset losses from the drop in Jindal Saw's long position.| Coal India vs. India Glycols Limited | Coal India vs. Indo Borax Chemicals | Coal India vs. Kingfa Science Technology | Coal India vs. Alkali Metals Limited |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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