Correlation Between Indian Oil and Zaggle Prepaid

Can any of the company-specific risk be diversified away by investing in both Indian Oil and Zaggle Prepaid 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 Indian Oil and Zaggle Prepaid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indian Oil and Zaggle Prepaid Ocean, you can compare the effects of market volatilities on Indian Oil and Zaggle Prepaid 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 Zaggle Prepaid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Zaggle Prepaid.

Diversification Opportunities for Indian Oil and Zaggle Prepaid

-0.12

Correlation Coefficient

Indian Oil  Zaggle Prepaid

Good diversification

The 3 months correlation between Indian and Zaggle is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Zaggle Prepaid Ocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaggle Prepaid Ocean 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 Zaggle Prepaid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaggle Prepaid Ocean has no effect on the direction of Indian Oil i.e., Indian Oil and Zaggle Prepaid go up and down completely randomly.

Pair Corralation between Indian Oil and Zaggle Prepaid

Assuming the 90 days trading horizon Indian Oil is expected to under-perform the Zaggle Prepaid. But the stock apears to be less risky and, when comparing its historical volatility, Indian Oil is 1.93 times less risky than Zaggle Prepaid. The stock trades about -0.42 of its potential returns per unit of risk. The Zaggle Prepaid Ocean is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  58,170  in Zaggle Prepaid Ocean on October 16, 2024 and sell it today you would lose (7,270) from holding Zaggle Prepaid Ocean or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Indian Oil  vs.  Zaggle Prepaid Ocean

Indian Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indian Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Zaggle Prepaid Ocean

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zaggle Prepaid Ocean are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Zaggle Prepaid sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indian Oil and Zaggle Prepaid

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

The idea behind Indian Oil and Zaggle Prepaid Ocean 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.