Correlation Between Oil Natural and PTC India
Can any of the company-specific risk be diversified away by investing in both Oil Natural and PTC India at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oil Natural and PTC India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Natural Gas and PTC India Limited, you can compare the effects of market volatilities on Oil Natural and PTC India 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 PTC India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and PTC India.
Diversification Opportunities for Oil Natural and PTC India
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oil and PTC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and PTC India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC India Limited 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 PTC India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC India Limited has no effect on the direction of Oil Natural i.e., Oil Natural and PTC India go up and down completely randomly.
Pair Corralation between Oil Natural and PTC India
Assuming the 90 days trading horizon Oil Natural is expected to generate 1.16 times less return on investment than PTC India. But when comparing it to its historical volatility, Oil Natural Gas is 1.39 times less risky than PTC India. It trades about 0.08 of its potential returns per unit of risk. PTC India Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,651 in PTC India Limited on September 3, 2024 and sell it today you would earn a total of 8,714 from holding PTC India Limited or generate 100.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.36% |
| Values | Daily Returns |
Oil Natural Gas vs. PTC India Limited
Performance |
| Timeline |
| Oil Natural Gas |
| PTC India Limited |
Oil Natural and PTC India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Natural and PTC India
The main advantage of trading using opposite Oil Natural and PTC India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Natural position performs unexpectedly, PTC India 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 PTC India will offset losses from the drop in PTC India's long position.| Oil Natural vs. Ratnamani Metals Tubes | Oil Natural vs. Jubilant Foodworks Limited | Oil Natural vs. Meghmani Organics Limited | Oil Natural vs. Hilton Metal Forging |
| PTC India vs. Pilani Investment and | PTC India vs. Ratnamani Metals Tubes | PTC India vs. POWERGRID Infrastructure Investment | PTC India vs. Hilton Metal Forging |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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