Correlation Between IG Petrochemicals and Thirumalai Chemicals
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By analyzing existing cross correlation between IG Petrochemicals Limited and Thirumalai Chemicals Limited, you can compare the effects of market volatilities on IG Petrochemicals and Thirumalai Chemicals 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 Thirumalai Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IG Petrochemicals and Thirumalai Chemicals.
Diversification Opportunities for IG Petrochemicals and Thirumalai Chemicals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGPL and Thirumalai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding IG Petrochemicals Limited and Thirumalai Chemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thirumalai Chemicals 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 Thirumalai Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thirumalai Chemicals has no effect on the direction of IG Petrochemicals i.e., IG Petrochemicals and Thirumalai Chemicals go up and down completely randomly.
Pair Corralation between IG Petrochemicals and Thirumalai Chemicals
Assuming the 90 days trading horizon IG Petrochemicals Limited is expected to under-perform the Thirumalai Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, IG Petrochemicals Limited is 1.14 times less risky than Thirumalai Chemicals. The stock trades about -0.4 of its potential returns per unit of risk. The Thirumalai Chemicals Limited is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 31,475 in Thirumalai Chemicals Limited on October 30, 2024 and sell it today you would lose (4,160) from holding Thirumalai Chemicals Limited or give up 13.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
IG Petrochemicals Limited vs. Thirumalai Chemicals Limited
Performance |
| Timeline |
| IG Petrochemicals |
| Thirumalai Chemicals |
IG Petrochemicals and Thirumalai Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IG Petrochemicals and Thirumalai Chemicals
The main advantage of trading using opposite IG Petrochemicals and Thirumalai Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IG Petrochemicals position performs unexpectedly, Thirumalai Chemicals 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 Thirumalai Chemicals will offset losses from the drop in Thirumalai Chemicals' long position.| IG Petrochemicals vs. GPT Healthcare | IG Petrochemicals vs. Aster DM Healthcare | IG Petrochemicals vs. Medplus Health Services | IG Petrochemicals vs. Sri Havisha Hospitality |
| Thirumalai Chemicals vs. NMDC Limited | Thirumalai Chemicals vs. Steel Authority of | Thirumalai Chemicals vs. Embassy Office Parks | Thirumalai Chemicals 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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