Correlation Between Coal India and Credo Brands
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By analyzing existing cross correlation between Coal India Limited and Credo Brands Marketing, you can compare the effects of market volatilities on Coal India and Credo Brands 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 Credo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coal India and Credo Brands.
Diversification Opportunities for Coal India and Credo Brands
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coal and Credo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Coal India Limited and Credo Brands Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credo Brands Marketing 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 Credo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credo Brands Marketing has no effect on the direction of Coal India i.e., Coal India and Credo Brands go up and down completely randomly.
Pair Corralation between Coal India and Credo Brands
Assuming the 90 days trading horizon Coal India Limited is expected to generate 0.62 times more return on investment than Credo Brands. However, Coal India Limited is 1.61 times less risky than Credo Brands. It trades about -0.1 of its potential returns per unit of risk. Credo Brands Marketing is currently generating about -0.26 per unit of risk. If you would invest 38,505 in Coal India Limited on December 1, 2024 and sell it today you would lose (1,570) from holding Coal India Limited or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coal India Limited vs. Credo Brands Marketing
Performance |
| Timeline |
| Coal India Limited |
| Credo Brands Marketing |
Coal India and Credo Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coal India and Credo Brands
The main advantage of trading using opposite Coal India and Credo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coal India position performs unexpectedly, Credo Brands 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 Credo Brands will offset losses from the drop in Credo Brands' long position.| Coal India vs. Clean Science and | Coal India vs. Samhi Hotels Limited | Coal India vs. Chalet Hotels Limited | Coal India vs. Akme Fintrade India |
| Credo Brands vs. Univa Foods Limited | Credo Brands vs. Shyam Metalics and | Credo Brands vs. Hilton Metal Forging | Credo Brands vs. Manaksia Coated Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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