Correlation Between Pritish Nandy and Indian OilLimited

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

By analyzing existing cross correlation between Pritish Nandy Communications and Indian Oil, you can compare the effects of market volatilities on Pritish Nandy and Indian OilLimited 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 Pritish Nandy with a short position of Indian OilLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pritish Nandy and Indian OilLimited.

Diversification Opportunities for Pritish Nandy and Indian OilLimited

0.49

Correlation Coefficient

Pritish Nandy  Indian OilLimited

Very weak diversification

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

Pair Corralation between Pritish Nandy and Indian OilLimited

Assuming the 90 days trading horizon Pritish Nandy Communications is expected to under-perform the Indian OilLimited. In addition to that, Pritish Nandy is 1.69 times more volatile than Indian Oil. It trades about -0.35 of its total potential returns per unit of risk. Indian Oil is currently generating about -0.04 per unit of volatility. If you would invest  13,644  in Indian Oil on December 31, 2024 and sell it today you would lose (874.00) from holding Indian Oil or give up 6.41% of portfolio value over 90 days.

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

Pritish Nandy Communications  vs.  Indian Oil

Pritish Nandy Commun

Risk-Adjusted Performance

Very Weak

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

Indian OilLimited

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Indian OilLimited is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pritish Nandy and Indian OilLimited

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

The idea behind Pritish Nandy Communications and Indian Oil 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.