Correlation Between Indian Oil and Bikaji Foods
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By analyzing existing cross correlation between Indian Oil and Bikaji Foods International, you can compare the effects of market volatilities on Indian Oil and Bikaji Foods 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 Oil with a short position of Bikaji Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Bikaji Foods.
Diversification Opportunities for Indian Oil and Bikaji Foods
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and Bikaji is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Bikaji Foods International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikaji Foods Interna and Indian Oil 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 Oil are associated (or correlated) with Bikaji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikaji Foods Interna has no effect on the direction of Indian Oil i.e., Indian Oil and Bikaji Foods go up and down completely randomly.
Pair Corralation between Indian Oil and Bikaji Foods
Assuming the 90 days trading horizon Indian Oil is expected to generate 1.11 times more return on investment than Bikaji Foods. However, Indian Oil is 1.11 times more volatile than Bikaji Foods International. It trades about 0.07 of its potential returns per unit of risk. Bikaji Foods International is currently generating about 0.08 per unit of risk. If you would invest 7,085 in Indian Oil on August 31, 2024 and sell it today you would earn a total of 6,778 from holding Indian Oil or generate 95.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Indian Oil vs. Bikaji Foods International
Performance |
| Timeline |
| Indian Oil |
| Bikaji Foods Interna |
Indian Oil and Bikaji Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and Bikaji Foods
The main advantage of trading using opposite Indian Oil and Bikaji Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Bikaji Foods 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 Bikaji Foods will offset losses from the drop in Bikaji Foods' long position.| Indian Oil vs. Oriental Hotels Limited | Indian Oil vs. Nahar Industrial Enterprises | Indian Oil vs. Aban Offshore Limited | Indian Oil vs. Blue Coast Hotels |
| Bikaji Foods vs. MRF Limited | Bikaji Foods vs. Bosch Limited | Bikaji Foods vs. Bajaj Holdings Investment | Bikaji Foods vs. Vardhman Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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