Correlation Between Orissa Minerals and Gillette India

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

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

Diversification Opportunities for Orissa Minerals and Gillette India

-0.42

Correlation Coefficient

Orissa Minerals  Gillette India

Very good diversification

The 3 months correlation between Orissa and Gillette is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Orissa Minerals and Gillette India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gillette India and Orissa Minerals 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 The Orissa Minerals are associated (or correlated) with Gillette India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gillette India has no effect on the direction of Orissa Minerals i.e., Orissa Minerals and Gillette India go up and down completely randomly.

Pair Corralation between Orissa Minerals and Gillette India

Assuming the 90 days trading horizon The Orissa Minerals is expected to generate 1.85 times more return on investment than Gillette India. However, Orissa Minerals is 1.85 times more volatile than Gillette India Limited. It trades about 0.06 of its potential returns per unit of risk. Gillette India Limited is currently generating about 0.09 per unit of risk. If you would invest  314,200  in The Orissa Minerals on October 13, 2024 and sell it today you would earn a total of  343,430  from holding The Orissa Minerals or generate 109.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

The Orissa Minerals  vs.  Gillette India Limited

Orissa Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gillette India

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gillette India Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gillette India may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Orissa Minerals and Gillette India

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

The idea behind The Orissa Minerals and Gillette India Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.