Correlation Between Indian Oil and India Glycols
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By analyzing existing cross correlation between Indian Oil and India Glycols Limited, you can compare the effects of market volatilities on Indian Oil and India Glycols 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 India Glycols. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and India Glycols.
Diversification Opportunities for Indian Oil and India Glycols
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indian and India is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and India Glycols Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Glycols Limited 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 India Glycols. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Glycols Limited has no effect on the direction of Indian Oil i.e., Indian Oil and India Glycols go up and down completely randomly.
Pair Corralation between Indian Oil and India Glycols
Assuming the 90 days trading horizon Indian Oil is expected to under-perform the India Glycols. But the stock apears to be less risky and, when comparing its historical volatility, Indian Oil is 1.64 times less risky than India Glycols. The stock trades about -0.08 of its potential returns per unit of risk. The India Glycols Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 119,840 in India Glycols Limited on September 1, 2024 and sell it today you would earn a total of 7,755 from holding India Glycols Limited or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Indian Oil vs. India Glycols Limited
Performance |
| Timeline |
| Indian Oil |
| India Glycols Limited |
Indian Oil and India Glycols Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and India Glycols
The main advantage of trading using opposite Indian Oil and India Glycols positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, India Glycols 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 India Glycols will offset losses from the drop in India Glycols' long position.| Indian Oil vs. Hindustan Construction | Indian Oil vs. Bharat Road Network | Indian Oil vs. Action Construction Equipment | Indian Oil vs. Shivalik Bimetal Controls |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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