Correlation Between India Glycols and Credo Brands

Can any of the company-specific risk be diversified away by investing in both India Glycols and Credo Brands 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 India Glycols and Credo Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between India Glycols Limited and Credo Brands Marketing, you can compare the effects of market volatilities on India Glycols and Credo Brands 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 India Glycols with a short position of Credo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of India Glycols and Credo Brands.

Diversification Opportunities for India Glycols and Credo Brands

0.49

Correlation Coefficient

India Glycols  Credo Brands

Very weak diversification

The 3 months correlation between India and Credo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding India Glycols Limited and Credo Brands Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credo Brands Marketing and India Glycols 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 India Glycols Limited are associated (or correlated) with Credo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credo Brands Marketing has no effect on the direction of India Glycols i.e., India Glycols and Credo Brands go up and down completely randomly.

Pair Corralation between India Glycols and Credo Brands

Assuming the 90 days trading horizon India Glycols Limited is expected to generate 1.21 times more return on investment than Credo Brands. However, India Glycols is 1.21 times more volatile than Credo Brands Marketing. It trades about 0.0 of its potential returns per unit of risk. Credo Brands Marketing is currently generating about -0.12 per unit of risk. If you would invest  114,300  in India Glycols Limited on November 20, 2024 and sell it today you would lose (2,780) from holding India Glycols Limited or give up 2.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

India Glycols Limited  vs.  Credo Brands Marketing

India Glycols Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days India Glycols Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, India Glycols is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Credo Brands Marketing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Credo Brands Marketing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with India Glycols and Credo Brands

The main advantage of trading using opposite India Glycols and Credo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if India Glycols position performs unexpectedly, Credo Brands 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 Credo Brands will offset losses from the drop in Credo Brands' long position.

The idea behind India Glycols Limited and Credo Brands Marketing 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.