Correlation Between GM Breweries and Indian Oil
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By analyzing existing cross correlation between GM Breweries Limited and Indian Oil, you can compare the effects of market volatilities on GM Breweries 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 GM Breweries with a short position of Indian Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and Indian Oil.
Diversification Opportunities for GM Breweries and Indian Oil
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GMBREW and Indian is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and Indian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Oil and GM Breweries 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 GM Breweries Limited 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 GM Breweries i.e., GM Breweries and Indian Oil go up and down completely randomly.
Pair Corralation between GM Breweries and Indian Oil
Assuming the 90 days trading horizon GM Breweries Limited is expected to under-perform the Indian Oil. In addition to that, GM Breweries is 1.22 times more volatile than Indian Oil. It trades about -0.15 of its total potential returns per unit of risk. Indian Oil is currently generating about -0.11 per unit of volatility. If you would invest 13,784 in Indian Oil on October 23, 2024 and sell it today you would lose (676.00) from holding Indian Oil or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GM Breweries Limited vs. Indian Oil
Performance |
| Timeline |
| GM Breweries Limited |
| Indian Oil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM Breweries and Indian Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and Indian Oil
The main advantage of trading using opposite GM Breweries and Indian Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries 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.| GM Breweries vs. Ortel Communications Limited | GM Breweries vs. Paramount Communications Limited | GM Breweries vs. Pritish Nandy Communications | GM Breweries vs. Speciality Restaurants Limited |
| Indian Oil vs. Zuari Agro Chemicals | Indian Oil vs. Shivalik Bimetal Controls | Indian Oil vs. Manaksia Coated Metals | Indian Oil vs. Rajnandini Metal Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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