Correlation Between Indian Oil and V2 Retail
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By analyzing existing cross correlation between Indian Oil and V2 Retail Limited, you can compare the effects of market volatilities on Indian Oil and V2 Retail 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 V2 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and V2 Retail.
Diversification Opportunities for Indian Oil and V2 Retail
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indian and V2RETAIL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and V2 Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2 Retail 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 V2 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2 Retail Limited has no effect on the direction of Indian Oil i.e., Indian Oil and V2 Retail go up and down completely randomly.
Pair Corralation between Indian Oil and V2 Retail
Assuming the 90 days trading horizon Indian Oil is expected to under-perform the V2 Retail. But the stock apears to be less risky and, when comparing its historical volatility, Indian Oil is 1.87 times less risky than V2 Retail. The stock trades about -0.18 of its potential returns per unit of risk. The V2 Retail Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 116,760 in V2 Retail Limited on August 28, 2024 and sell it today you would earn a total of 9,100 from holding V2 Retail Limited or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Indian Oil vs. V2 Retail Limited
Performance |
| Timeline |
| Indian Oil |
| V2 Retail Limited |
Indian Oil and V2 Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and V2 Retail
The main advantage of trading using opposite Indian Oil and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, V2 Retail 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 V2 Retail will offset losses from the drop in V2 Retail's long position.| Indian Oil vs. California Software | Indian Oil vs. Music Broadcast Limited | Indian Oil vs. Hindware Home Innovation | Indian Oil vs. Credo Brands Marketing |
| V2 Retail vs. MRF Limited | V2 Retail vs. The Orissa Minerals | V2 Retail vs. Honeywell Automation India | V2 Retail vs. Page Industries 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.
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