Correlation Between Oil Country and Likhitha Infrastructure

Can any of the company-specific risk be diversified away by investing in both Oil Country and Likhitha Infrastructure 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 Oil Country and Likhitha Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oil Country Tubular and Likhitha Infrastructure Limited, you can compare the effects of market volatilities on Oil Country and Likhitha Infrastructure 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 Oil Country with a short position of Likhitha Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Country and Likhitha Infrastructure.

Diversification Opportunities for Oil Country and Likhitha Infrastructure

0.42

Correlation Coefficient

Oil Country  Likhitha Infrastructure

Very weak diversification

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

Pair Corralation between Oil Country and Likhitha Infrastructure

Assuming the 90 days trading horizon Oil Country Tubular is expected to generate 1.38 times more return on investment than Likhitha Infrastructure. However, Oil Country is 1.38 times more volatile than Likhitha Infrastructure Limited. It trades about 0.15 of its potential returns per unit of risk. Likhitha Infrastructure Limited is currently generating about 0.03 per unit of risk. If you would invest  7,010  in Oil Country Tubular on April 25, 2025 and sell it today you would earn a total of  2,030  from holding Oil Country Tubular or generate 28.96% return on investment over 90 days.

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

Oil Country Tubular  vs.  Likhitha Infrastructure Limite

Oil Country Tubular

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oil Country Tubular are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Oil Country displayed solid returns over the last few months and may actually be approaching a breakup point.

Likhitha Infrastructure

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Likhitha Infrastructure Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Likhitha Infrastructure is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Oil Country and Likhitha Infrastructure

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

The idea behind Oil Country Tubular and Likhitha Infrastructure 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.