Correlation Between REC and Indian Renewable
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By analyzing existing cross correlation between REC Limited and Indian Renewable Energy, you can compare the effects of market volatilities on REC and Indian Renewable 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 REC with a short position of Indian Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC and Indian Renewable.
Diversification Opportunities for REC and Indian Renewable
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REC and Indian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding REC Limited and Indian Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Renewable Energy and REC 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 REC Limited are associated (or correlated) with Indian Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Renewable Energy has no effect on the direction of REC i.e., REC and Indian Renewable go up and down completely randomly.
Pair Corralation between REC and Indian Renewable
Assuming the 90 days trading horizon REC Limited is expected to generate 0.91 times more return on investment than Indian Renewable. However, REC Limited is 1.09 times less risky than Indian Renewable. It trades about 0.04 of its potential returns per unit of risk. Indian Renewable Energy is currently generating about -0.04 per unit of risk. 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 |
REC Limited vs. Indian Renewable Energy
Performance |
| Timeline |
| REC Limited |
| Indian Renewable Energy |
REC and Indian Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC and Indian Renewable
The main advantage of trading using opposite REC and Indian Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC position performs unexpectedly, Indian Renewable 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 Indian Renewable will offset losses from the drop in Indian Renewable's long position.| REC vs. Tata Investment | REC vs. Kalyani Investment | REC vs. Popular Vehicles and | REC vs. Tamilnadu Telecommunication Limited |
| Indian Renewable vs. Bajaj Finance Limited | Indian Renewable vs. Indian Railway Finance | Indian Renewable vs. Power Finance | Indian Renewable vs. REC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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