Correlation Between Indian Overseas and REC
Specify exactly 2 symbols:
By analyzing existing cross correlation between Indian Overseas Bank and REC Limited, you can compare the effects of market volatilities on Indian Overseas and REC 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 Indian Overseas with a short position of REC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Overseas and REC.
Diversification Opportunities for Indian Overseas and REC
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indian and REC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Indian Overseas Bank and REC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC Limited and Indian Overseas 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 Indian Overseas Bank are associated (or correlated) with REC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Limited has no effect on the direction of Indian Overseas i.e., Indian Overseas and REC go up and down completely randomly.
Pair Corralation between Indian Overseas and REC
Assuming the 90 days trading horizon Indian Overseas Bank is expected to generate 1.65 times more return on investment than REC. However, Indian Overseas is 1.65 times more volatile than REC Limited. It trades about -0.01 of its potential returns per unit of risk. REC Limited is currently generating about -0.09 per unit of risk. If you would invest 5,240 in Indian Overseas Bank on October 21, 2024 and sell it today you would lose (176.00) from holding Indian Overseas Bank or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Overseas Bank vs. REC Limited
Performance |
| Timeline |
| Indian Overseas Bank |
| REC Limited |
Indian Overseas and REC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Overseas and REC
The main advantage of trading using opposite Indian Overseas and REC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Overseas position performs unexpectedly, REC 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 REC will offset losses from the drop in REC's long position.| Indian Overseas vs. Kingfa Science Technology | Indian Overseas vs. Rico Auto Industries | Indian Overseas vs. GACM Technologies Limited | Indian Overseas vs. COSMO FIRST 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |