Reliance – A Good Opportunity

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Date : 09-Mar-2020 | Update Note of Reliance Industries

Today’s market carnage was majorly contributed by massive selling of Reliance Industries Shares . In overall FII’s sold over INR 6000 Crores in Cash Market , DII’s pumped over INR 4000 crores in Indian Markets today 09-Mar-2020.

I was curious to check movement and correlation of Returns of Reliance Industries vs Brent Crude. Here are some useful information:

Period of Analytics is March 2014 to 9 th March 2020 of Price returns of Reliance Industries vs Brent Crude

Correlation of Reliance vs Brent Crude for 6 Years0.2
Standard Deviation of Brent Crude for 6 Years$17Standard Deviation of Reliance Industries351
Mean Value for Brent Crude$62Mean Value for Reliance Industries801
At Current Price of 32, Crude is approx ~2 Standard Deviation below Mean price
At Current Price of 1104, Reliance is approx ~1 Standard Deviation above its Mean price

Year- wise correlation of the Brent Crude vs Reliance Industries.

Reliance has diversified into various fields since 2014 citing that Crude / Oil business as a concentrated business which needs further diversification and new and relevant business models. The correlation of returns has come drastically down from 0.40 in year 2014 to 0.20 in the year 2019 and even negative in year 2018.

This is a substantial measure of Reliance Independent performance .

Overall 6 year month wise %return analysis of Brent Crude vs Reliance Industries.

However this time there are multiple reasons due to which sentiments have taken a hit as countries have been slow in reporting and containing the deadly corona virus pandemic.

Conclusion : This is a very risky market for me to suggest trading calls ,

Disclosure :  However i would like to mention that i have personally bought Long calls today in Reliance at these levels.

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