Correlation Between Oil Natural and Golden Tobacco
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By analyzing existing cross correlation between Oil Natural Gas and Golden Tobacco Limited, you can compare the effects of market volatilities on Oil Natural and Golden Tobacco 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 Oil Natural with a short position of Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and Golden Tobacco.
Diversification Opportunities for Oil Natural and Golden Tobacco
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oil and Golden is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco and Oil Natural 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 Oil Natural Gas are associated (or correlated) with Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of Oil Natural i.e., Oil Natural and Golden Tobacco go up and down completely randomly.
Pair Corralation between Oil Natural and Golden Tobacco
Assuming the 90 days trading horizon Oil Natural Gas is expected to generate 0.94 times more return on investment than Golden Tobacco. However, Oil Natural Gas is 1.06 times less risky than Golden Tobacco. It trades about 0.07 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about -0.03 per unit of risk. If you would invest 18,337 in Oil Natural Gas on September 14, 2024 and sell it today you would earn a total of 7,068 from holding Oil Natural Gas or generate 38.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Natural Gas vs. Golden Tobacco Limited
Performance |
| Timeline |
| Oil Natural Gas |
| Golden Tobacco |
Oil Natural and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Natural and Golden Tobacco
The main advantage of trading using opposite Oil Natural and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Natural position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| Oil Natural vs. Compucom Software Limited | Oil Natural vs. Tata Chemicals Limited | Oil Natural vs. Rashtriya Chemicals and | Oil Natural vs. Fertilizers and Chemicals |
| Golden Tobacco vs. Reliance Industries Limited | Golden Tobacco vs. Oil Natural Gas | Golden Tobacco vs. ICICI Bank Limited | Golden Tobacco vs. Bharti Airtel 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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