Correlation Between Raj Oil and IdeaForge Technology

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

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

Diversification Opportunities for Raj Oil and IdeaForge Technology

0.61

Correlation Coefficient

Raj Oil  IdeaForge Technology

Poor diversification

The 3 months correlation between Raj and IdeaForge is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Raj Oil Mills and ideaForge Technology Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ideaForge Technology and Raj 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 Raj Oil Mills are associated (or correlated) with IdeaForge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ideaForge Technology has no effect on the direction of Raj Oil i.e., Raj Oil and IdeaForge Technology go up and down completely randomly.

Pair Corralation between Raj Oil and IdeaForge Technology

Assuming the 90 days trading horizon Raj Oil is expected to generate 3.73 times less return on investment than IdeaForge Technology. But when comparing it to its historical volatility, Raj Oil Mills is 1.14 times less risky than IdeaForge Technology. It trades about 0.05 of its potential returns per unit of risk. ideaForge Technology Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  37,430  in ideaForge Technology Limited on April 23, 2025 and sell it today you would earn a total of  17,065  from holding ideaForge Technology Limited or generate 45.59% return on investment over 90 days.

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

Raj Oil Mills  vs.  ideaForge Technology Limited

Raj Oil Mills

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Raj Oil Mills are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raj Oil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ideaForge Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ideaForge Technology Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, IdeaForge Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raj Oil and IdeaForge Technology

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

The idea behind Raj Oil Mills and ideaForge Technology 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.