Correlation Between Generic Engineering and IG Petrochemicals
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By analyzing existing cross correlation between Generic Engineering Construction and IG Petrochemicals Limited, you can compare the effects of market volatilities on Generic Engineering and IG Petrochemicals 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 Generic Engineering with a short position of IG Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Engineering and IG Petrochemicals.
Diversification Opportunities for Generic Engineering and IG Petrochemicals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Generic and IGPL is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Generic Engineering Constructi and IG Petrochemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IG Petrochemicals and Generic Engineering 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 Generic Engineering Construction are associated (or correlated) with IG Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IG Petrochemicals has no effect on the direction of Generic Engineering i.e., Generic Engineering and IG Petrochemicals go up and down completely randomly.
Pair Corralation between Generic Engineering and IG Petrochemicals
Assuming the 90 days trading horizon Generic Engineering Construction is expected to generate 1.88 times more return on investment than IG Petrochemicals. However, Generic Engineering is 1.88 times more volatile than IG Petrochemicals Limited. It trades about -0.13 of its potential returns per unit of risk. IG Petrochemicals Limited is currently generating about -0.26 per unit of risk. If you would invest 4,578 in Generic Engineering Construction on October 11, 2024 and sell it today you would lose (556.00) from holding Generic Engineering Construction or give up 12.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generic Engineering Constructi vs. IG Petrochemicals Limited
Performance |
| Timeline |
| Generic Engineering |
| IG Petrochemicals |
Generic Engineering and IG Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Engineering and IG Petrochemicals
The main advantage of trading using opposite Generic Engineering and IG Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Engineering position performs unexpectedly, IG Petrochemicals 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 IG Petrochemicals will offset losses from the drop in IG Petrochemicals' long position.| Generic Engineering vs. Hindware Home Innovation | Generic Engineering vs. The Investment Trust | Generic Engineering vs. Shyam Metalics and | Generic Engineering 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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