Correlation Between Indian Oil and Praxis Home
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By analyzing existing cross correlation between Indian Oil and Praxis Home Retail, you can compare the effects of market volatilities on Indian Oil and Praxis Home 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 Indian Oil with a short position of Praxis Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Praxis Home.
Diversification Opportunities for Indian Oil and Praxis Home
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indian and Praxis is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Praxis Home Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Home Retail and Indian Oil 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 Indian Oil are associated (or correlated) with Praxis Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Home Retail has no effect on the direction of Indian Oil i.e., Indian Oil and Praxis Home go up and down completely randomly.
Pair Corralation between Indian Oil and Praxis Home
Assuming the 90 days trading horizon Indian Oil is expected to generate 0.53 times more return on investment than Praxis Home. However, Indian Oil is 1.89 times less risky than Praxis Home. It trades about -0.17 of its potential returns per unit of risk. Praxis Home Retail is currently generating about -0.13 per unit of risk. If you would invest 16,280 in Indian Oil on October 7, 2024 and sell it today you would lose (2,466) from holding Indian Oil or give up 15.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Indian Oil vs. Praxis Home Retail
Performance |
Timeline |
Indian Oil |
Praxis Home Retail |
Indian Oil and Praxis Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indian Oil and Praxis Home
The main advantage of trading using opposite Indian Oil and Praxis Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Praxis Home 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 Praxis Home will offset losses from the drop in Praxis Home's long position.Indian Oil vs. JB Chemicals Pharmaceuticals | Indian Oil vs. Sanginita Chemicals Limited | Indian Oil vs. Bajaj Holdings Investment | Indian Oil vs. Teamlease Services Limited |
Praxis Home vs. Reliance Industries Limited | Praxis Home vs. Oil Natural Gas | Praxis Home vs. Power Finance | Praxis Home vs. Indian Oil |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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