Correlation Between Oil Natural and PTC India

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

By analyzing existing cross correlation between Oil Natural Gas and PTC India Financial, you can compare the effects of market volatilities on Oil Natural and PTC India 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 Oil Natural with a short position of PTC India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and PTC India.

Diversification Opportunities for Oil Natural and PTC India

0.53

Correlation Coefficient

Oil Natural  PTC India

Very weak diversification

The 3 months correlation between Oil and PTC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and PTC India Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC India Financial and Oil Natural 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 Oil Natural Gas are associated (or correlated) with PTC India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC India Financial has no effect on the direction of Oil Natural i.e., Oil Natural and PTC India go up and down completely randomly.

Pair Corralation between Oil Natural and PTC India

Assuming the 90 days trading horizon Oil Natural Gas is expected to generate 0.64 times more return on investment than PTC India. However, Oil Natural Gas is 1.56 times less risky than PTC India. It trades about 0.01 of its potential returns per unit of risk. PTC India Financial is currently generating about -0.1 per unit of risk. If you would invest  23,615  in Oil Natural Gas on December 21, 2024 and sell it today you would lose (56.00) from holding Oil Natural Gas or give up 0.24% of portfolio value over 90 days.

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

Oil Natural Gas  vs.  PTC India Financial

Oil Natural Gas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oil Natural Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Oil Natural is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

PTC India Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTC India Financial 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Oil Natural and PTC India

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

The idea behind Oil Natural Gas and PTC India Financial 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.