Correlation Between Indian Oil and Newgen Software
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By analyzing existing cross correlation between Indian Oil and Newgen Software Technologies, you can compare the effects of market volatilities on Indian Oil and Newgen Software 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 Newgen Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Newgen Software.
Diversification Opportunities for Indian Oil and Newgen Software
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indian and Newgen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Newgen Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newgen Software Tech 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 Newgen Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newgen Software Tech has no effect on the direction of Indian Oil i.e., Indian Oil and Newgen Software go up and down completely randomly.
Pair Corralation between Indian Oil and Newgen Software
Assuming the 90 days trading horizon Indian Oil is expected to generate 3.08 times less return on investment than Newgen Software. But when comparing it to its historical volatility, Indian Oil is 1.28 times less risky than Newgen Software. It trades about 0.04 of its potential returns per unit of risk. Newgen Software Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 72,019 in Newgen Software Technologies on September 12, 2024 and sell it today you would earn a total of 69,736 from holding Newgen Software Technologies or generate 96.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Indian Oil vs. Newgen Software Technologies
Performance |
| Timeline |
| Indian Oil |
| Newgen Software Tech |
Indian Oil and Newgen Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and Newgen Software
The main advantage of trading using opposite Indian Oil and Newgen Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Newgen Software 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 Newgen Software will offset losses from the drop in Newgen Software's long position.| Indian Oil vs. Computer Age Management | Indian Oil vs. Tata Chemicals Limited | Indian Oil vs. Gujarat Fluorochemicals Limited | Indian Oil vs. Dharani SugarsChemicals Limited |
| Newgen Software vs. Reliance Industries Limited | Newgen Software vs. Oil Natural Gas | Newgen Software vs. Indian Oil | Newgen Software vs. HDFC Bank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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