Correlation Between POWERGRID Infrastructure and Tata Communications
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By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Tata Communications Limited, you can compare the effects of market volatilities on POWERGRID Infrastructure and Tata Communications 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 POWERGRID Infrastructure with a short position of Tata Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Tata Communications.
Diversification Opportunities for POWERGRID Infrastructure and Tata Communications
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POWERGRID and Tata is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Tata Communications Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Communications and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Tata Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Communications has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Tata Communications go up and down completely randomly.
Pair Corralation between POWERGRID Infrastructure and Tata Communications
Assuming the 90 days trading horizon POWERGRID Infrastructure is expected to generate 2.46 times less return on investment than Tata Communications. But when comparing it to its historical volatility, POWERGRID Infrastructure Investment is 3.56 times less risky than Tata Communications. It trades about 0.13 of its potential returns per unit of risk. Tata Communications Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 168,600 in Tata Communications Limited on August 17, 2025 and sell it today you would earn a total of 18,800 from holding Tata Communications Limited or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POWERGRID Infrastructure Inves vs. Tata Communications Limited
Performance |
| Timeline |
| POWERGRID Infrastructure |
| Tata Communications |
POWERGRID Infrastructure and Tata Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWERGRID Infrastructure and Tata Communications
The main advantage of trading using opposite POWERGRID Infrastructure and Tata Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWERGRID Infrastructure position performs unexpectedly, Tata Communications 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 Tata Communications will offset losses from the drop in Tata Communications' long position.The idea behind POWERGRID Infrastructure Investment and Tata Communications 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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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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