Correlation Between Refex Industries and Ortel Communications
Can any of the company-specific risk be diversified away by investing in both Refex Industries and Ortel Communications 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 Refex Industries and Ortel Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Refex Industries Limited and Ortel Communications Limited, you can compare the effects of market volatilities on Refex Industries and Ortel Communications 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 Refex Industries with a short position of Ortel Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refex Industries and Ortel Communications.
Diversification Opportunities for Refex Industries and Ortel Communications
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Refex and Ortel is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Refex Industries Limited and Ortel Communications Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ortel Communications and Refex Industries 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 Refex Industries Limited are associated (or correlated) with Ortel Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ortel Communications has no effect on the direction of Refex Industries i.e., Refex Industries and Ortel Communications go up and down completely randomly.
Pair Corralation between Refex Industries and Ortel Communications
Assuming the 90 days trading horizon Refex Industries Limited is expected to generate 1.6 times more return on investment than Ortel Communications. However, Refex Industries is 1.6 times more volatile than Ortel Communications Limited. It trades about 0.19 of its potential returns per unit of risk. Ortel Communications Limited is currently generating about 0.11 per unit of risk. If you would invest 13,388 in Refex Industries Limited on August 25, 2024 and sell it today you would earn a total of 33,652 from holding Refex Industries Limited or generate 251.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.91% |
| Values | Daily Returns |
Refex Industries Limited vs. Ortel Communications Limited
Performance |
| Timeline |
| Refex Industries |
| Ortel Communications |
Refex Industries and Ortel Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refex Industries and Ortel Communications
The main advantage of trading using opposite Refex Industries and Ortel Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refex Industries position performs unexpectedly, Ortel Communications 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 Ortel Communications will offset losses from the drop in Ortel Communications' long position.| Refex Industries vs. Digjam Limited | Refex Industries vs. Gujarat Raffia Industries | Refex Industries vs. Kingfa Science Technology | Refex Industries vs. Rico Auto Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |