Correlation Between Reliance Industries and FDM Group
Can any of the company-specific risk be diversified away by investing in both Reliance Industries and FDM Group 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 Reliance Industries and FDM Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Industries Limited and FDM Group Holdings, you can compare the effects of market volatilities on Reliance Industries and FDM Group 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 Reliance Industries with a short position of FDM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Industries and FDM Group.
Diversification Opportunities for Reliance Industries and FDM Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Reliance and FDM is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Industries Limited and FDM Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDM Group Holdings and Reliance Industries 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 Reliance Industries Limited are associated (or correlated) with FDM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDM Group Holdings has no effect on the direction of Reliance Industries i.e., Reliance Industries and FDM Group go up and down completely randomly.
Pair Corralation between Reliance Industries and FDM Group
Assuming the 90 days trading horizon Reliance Industries Limited is expected to generate 0.26 times more return on investment than FDM Group. However, Reliance Industries Limited is 3.84 times less risky than FDM Group. It trades about -0.13 of its potential returns per unit of risk. FDM Group Holdings is currently generating about -0.11 per unit of risk. If you would invest 6,857 in Reliance Industries Limited on July 15, 2025 and sell it today you would lose (707.00) from holding Reliance Industries Limited or give up 10.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Industries Limited vs. FDM Group Holdings
Performance |
| Timeline |
| Reliance Industries |
| FDM Group Holdings |
Reliance Industries and FDM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Industries and FDM Group
The main advantage of trading using opposite Reliance Industries and FDM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Industries position performs unexpectedly, FDM Group 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 FDM Group will offset losses from the drop in FDM Group's long position.| Reliance Industries vs. Bellevue Healthcare Trust | Reliance Industries vs. Hecla Mining Co | Reliance Industries vs. Naturhouse Health SA | Reliance Industries vs. Optima Health plc |
| FDM Group vs. Samsung Electronics Co | FDM Group vs. Samsung Electronics Co | FDM Group vs. Samsung Electronics Co | FDM Group vs. Toyota Motor Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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