Correlation Between IG Petrochemicals and Aarti Drugs
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By analyzing existing cross correlation between IG Petrochemicals Limited and Aarti Drugs Limited, you can compare the effects of market volatilities on IG Petrochemicals and Aarti Drugs 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 IG Petrochemicals with a short position of Aarti Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IG Petrochemicals and Aarti Drugs.
Diversification Opportunities for IG Petrochemicals and Aarti Drugs
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGPL and Aarti is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding IG Petrochemicals Limited and Aarti Drugs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarti Drugs Limited and IG Petrochemicals 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 IG Petrochemicals Limited are associated (or correlated) with Aarti Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarti Drugs Limited has no effect on the direction of IG Petrochemicals i.e., IG Petrochemicals and Aarti Drugs go up and down completely randomly.
Pair Corralation between IG Petrochemicals and Aarti Drugs
Assuming the 90 days trading horizon IG Petrochemicals Limited is expected to under-perform the Aarti Drugs. In addition to that, IG Petrochemicals is 1.31 times more volatile than Aarti Drugs Limited. It trades about -0.37 of its total potential returns per unit of risk. Aarti Drugs Limited is currently generating about -0.22 per unit of volatility. If you would invest 46,185 in Aarti Drugs Limited on November 6, 2024 and sell it today you would lose (3,845) from holding Aarti Drugs Limited or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IG Petrochemicals Limited vs. Aarti Drugs Limited
Performance |
| Timeline |
| IG Petrochemicals |
| Aarti Drugs Limited |
IG Petrochemicals and Aarti Drugs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IG Petrochemicals and Aarti Drugs
The main advantage of trading using opposite IG Petrochemicals and Aarti Drugs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IG Petrochemicals position performs unexpectedly, Aarti Drugs 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 Aarti Drugs will offset losses from the drop in Aarti Drugs' long position.| IG Petrochemicals vs. Reliance Home Finance | IG Petrochemicals vs. Music Broadcast Limited | IG Petrochemicals vs. Garware Hi Tech Films | IG Petrochemicals vs. Le Travenues Technology |
| Aarti Drugs vs. AUTHUM INVESTMENT INFRASTRUCTU | Aarti Drugs vs. Cambridge Technology Enterprises | Aarti Drugs vs. Beta Drugs | Aarti Drugs vs. Bajaj Holdings Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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