Correlation Between Indian Oil and Bosch
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By analyzing existing cross correlation between Indian Oil and Bosch Limited, you can compare the effects of market volatilities on Indian Oil and Bosch 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 Bosch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Bosch.
Diversification Opportunities for Indian Oil and Bosch
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and Bosch is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Bosch Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Limited 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 Bosch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Limited has no effect on the direction of Indian Oil i.e., Indian Oil and Bosch go up and down completely randomly.
Pair Corralation between Indian Oil and Bosch
Assuming the 90 days trading horizon Indian Oil is expected to under-perform the Bosch. In addition to that, Indian Oil is 1.2 times more volatile than Bosch Limited. It trades about -0.19 of its total potential returns per unit of risk. Bosch Limited is currently generating about -0.06 per unit of volatility. If you would invest 3,670,330 in Bosch Limited on September 24, 2024 and sell it today you would lose (212,635) from holding Bosch Limited or give up 5.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Indian Oil vs. Bosch Limited
Performance |
Timeline |
Indian Oil |
Bosch Limited |
Indian Oil and Bosch Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indian Oil and Bosch
The main advantage of trading using opposite Indian Oil and Bosch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Bosch 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 Bosch will offset losses from the drop in Bosch's long position.Indian Oil vs. HDFC Life Insurance | Indian Oil vs. Cartrade Tech Limited | Indian Oil vs. V Mart Retail Limited | Indian Oil vs. V2 Retail Limited |
Bosch vs. Reliance Industries Limited | Bosch vs. Life Insurance | Bosch vs. Indian Oil | Bosch vs. Oil Natural Gas |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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