Correlation Between Indian Oil and Can Fin
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By analyzing existing cross correlation between Indian Oil and Can Fin Homes, you can compare the effects of market volatilities on Indian Oil and Can Fin 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 Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Can Fin.
Diversification Opportunities for Indian Oil and Can Fin
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and Can is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes 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 Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Indian Oil i.e., Indian Oil and Can Fin go up and down completely randomly.
Pair Corralation between Indian Oil and Can Fin
Assuming the 90 days trading horizon Indian Oil is expected to under-perform the Can Fin. But the stock apears to be less risky and, when comparing its historical volatility, Indian Oil is 1.05 times less risky than Can Fin. The stock trades about -0.17 of its potential returns per unit of risk. The Can Fin Homes is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 90,326 in Can Fin Homes on September 12, 2024 and sell it today you would lose (8,331) from holding Can Fin Homes or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Oil vs. Can Fin Homes
Performance |
| Timeline |
| Indian Oil |
| Can Fin Homes |
Indian Oil and Can Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and Can Fin
The main advantage of trading using opposite Indian Oil and Can Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Can Fin 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 Can Fin will offset losses from the drop in Can Fin's long position.| Indian Oil vs. Kalyani Investment | Indian Oil vs. Praxis Home Retail | Indian Oil vs. The Investment Trust | Indian Oil vs. Nalwa Sons Investments |
| Can Fin vs. Network18 Media Investments | Can Fin vs. Touchwood Entertainment Limited | Can Fin vs. Hindustan Media Ventures | Can Fin vs. Garuda Construction Engineering |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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