Correlation Between Shivalik Bimetal and IG Petrochemicals
Can any of the company-specific risk be diversified away by investing in both Shivalik Bimetal and IG Petrochemicals 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 Shivalik Bimetal and IG Petrochemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shivalik Bimetal Controls and IG Petrochemicals Limited, you can compare the effects of market volatilities on Shivalik Bimetal and IG Petrochemicals 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 Shivalik Bimetal with a short position of IG Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shivalik Bimetal and IG Petrochemicals.
Diversification Opportunities for Shivalik Bimetal and IG Petrochemicals
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shivalik and IGPL is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and IG Petrochemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IG Petrochemicals and Shivalik Bimetal 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 Shivalik Bimetal Controls are associated (or correlated) with IG Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IG Petrochemicals has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and IG Petrochemicals go up and down completely randomly.
Pair Corralation between Shivalik Bimetal and IG Petrochemicals
Assuming the 90 days trading horizon Shivalik Bimetal Controls is expected to generate 0.94 times more return on investment than IG Petrochemicals. However, Shivalik Bimetal Controls is 1.06 times less risky than IG Petrochemicals. It trades about -0.11 of its potential returns per unit of risk. IG Petrochemicals Limited is currently generating about -0.26 per unit of risk. If you would invest 60,000 in Shivalik Bimetal Controls on October 11, 2024 and sell it today you would lose (3,120) from holding Shivalik Bimetal Controls or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shivalik Bimetal Controls vs. IG Petrochemicals Limited
Performance |
| Timeline |
| Shivalik Bimetal Controls |
| IG Petrochemicals |
Shivalik Bimetal and IG Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shivalik Bimetal and IG Petrochemicals
The main advantage of trading using opposite Shivalik Bimetal and IG Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shivalik Bimetal position performs unexpectedly, IG Petrochemicals 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 IG Petrochemicals will offset losses from the drop in IG Petrochemicals' long position.| Shivalik Bimetal vs. Ami Organics Limited | Shivalik Bimetal vs. Jayant Agro Organics | Shivalik Bimetal vs. Gokul Refoils and | Shivalik Bimetal vs. Sapphire Foods India |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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