Correlation Between POWERGRID Infrastructure and Jindal Poly
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By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Jindal Poly Investment, you can compare the effects of market volatilities on POWERGRID Infrastructure and Jindal Poly 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 POWERGRID Infrastructure with a short position of Jindal Poly. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Jindal Poly.
Diversification Opportunities for POWERGRID Infrastructure and Jindal Poly
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between POWERGRID and Jindal is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Jindal Poly Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Poly Investment and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Jindal Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Poly Investment has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Jindal Poly go up and down completely randomly.
Pair Corralation between POWERGRID Infrastructure and Jindal Poly
Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to generate 0.23 times more return on investment than Jindal Poly. However, POWERGRID Infrastructure Investment is 4.42 times less risky than Jindal Poly. It trades about -0.55 of its potential returns per unit of risk. Jindal Poly Investment is currently generating about -0.18 per unit of risk. If you would invest 8,170 in POWERGRID Infrastructure Investment on December 13, 2024 and sell it today you would lose (585.00) from holding POWERGRID Infrastructure Investment or give up 7.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
POWERGRID Infrastructure Inves vs. Jindal Poly Investment
Performance |
| Timeline |
| POWERGRID Infrastructure |
| Jindal Poly Investment |
POWERGRID Infrastructure and Jindal Poly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWERGRID Infrastructure and Jindal Poly
The main advantage of trading using opposite POWERGRID Infrastructure and Jindal Poly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWERGRID Infrastructure position performs unexpectedly, Jindal Poly 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 Jindal Poly will offset losses from the drop in Jindal Poly's long position.The idea behind POWERGRID Infrastructure Investment and Jindal Poly Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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