Correlation Between Hindustan Copper and IG Petrochemicals
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By analyzing existing cross correlation between Hindustan Copper Limited and IG Petrochemicals Limited, you can compare the effects of market volatilities on Hindustan Copper 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 Hindustan Copper with a short position of IG Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hindustan Copper and IG Petrochemicals.
Diversification Opportunities for Hindustan Copper and IG Petrochemicals
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hindustan and IGPL is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hindustan Copper Limited and IG Petrochemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IG Petrochemicals and Hindustan Copper 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 Hindustan Copper Limited 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 Hindustan Copper i.e., Hindustan Copper and IG Petrochemicals go up and down completely randomly.
Pair Corralation between Hindustan Copper and IG Petrochemicals
Assuming the 90 days trading horizon Hindustan Copper Limited is expected to generate 1.27 times more return on investment than IG Petrochemicals. However, Hindustan Copper is 1.27 times more volatile than IG Petrochemicals Limited. It trades about 0.07 of its potential returns per unit of risk. IG Petrochemicals Limited is currently generating about 0.01 per unit of risk. If you would invest 10,497 in Hindustan Copper Limited on November 4, 2024 and sell it today you would earn a total of 13,401 from holding Hindustan Copper Limited or generate 127.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Hindustan Copper Limited vs. IG Petrochemicals Limited
Performance |
| Timeline |
| Hindustan Copper |
| IG Petrochemicals |
Hindustan Copper and IG Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hindustan Copper and IG Petrochemicals
The main advantage of trading using opposite Hindustan Copper and IG Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hindustan Copper 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.| Hindustan Copper vs. Pilani Investment and | Hindustan Copper vs. POWERGRID Infrastructure Investment | Hindustan Copper vs. BF Investment Limited | Hindustan Copper vs. Cholamandalam Investment and |
| IG Petrochemicals vs. NMDC Limited | IG Petrochemicals vs. Steel Authority of | IG Petrochemicals vs. Embassy Office Parks | IG Petrochemicals vs. Jai Balaji Industries |
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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