Correlation Between Indian Renewable and REC
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By analyzing existing cross correlation between Indian Renewable Energy and REC Limited, you can compare the effects of market volatilities on Indian Renewable and REC 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 Renewable with a short position of REC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Renewable and REC.
Diversification Opportunities for Indian Renewable and REC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and REC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Indian Renewable Energy and REC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC Limited and Indian Renewable 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 Renewable Energy are associated (or correlated) with REC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Limited has no effect on the direction of Indian Renewable i.e., Indian Renewable and REC go up and down completely randomly.
Pair Corralation between Indian Renewable and REC
Assuming the 90 days trading horizon Indian Renewable Energy is expected to under-perform the REC. In addition to that, Indian Renewable is 1.09 times more volatile than REC Limited. It trades about -0.04 of its total potential returns per unit of risk. REC Limited is currently generating about 0.04 per unit of volatility. If you would invest 52,680 in REC Limited on September 2, 2024 and sell it today you would earn a total of 580.00 from holding REC Limited or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Indian Renewable Energy vs. REC Limited
Performance |
| Timeline |
| Indian Renewable Energy |
| REC Limited |
Indian Renewable and REC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Renewable and REC
The main advantage of trading using opposite Indian Renewable and REC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Renewable position performs unexpectedly, REC 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 REC will offset losses from the drop in REC's long position.| Indian Renewable vs. Bajaj Finance Limited | Indian Renewable vs. Indian Railway Finance | Indian Renewable vs. Power Finance | Indian Renewable vs. REC Limited |
| REC vs. Tata Investment | REC vs. Kalyani Investment | REC vs. Popular Vehicles and | REC vs. Tamilnadu Telecommunication 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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