Well the main business of Ril is refining and petrochemicals and they are very well related to Crude. So we first need to check how well is the crude movemnet linked to Ril.
The following chart shows the coorealtion between the Ril and Crude futures (CL1.)
The coorealtion ha sbeen quite high and has hovered above the 0.7 for last 3 years. The value of 0.7 is quite high with R^2 of 0.06.
This is done on weekly charts so as to smoothen the daily volaitlity.
Next I overlayed the Ril and Cl1 on same chart to see how they behaved on the same weekly term.
Well they behaved more in same way then in different way.
Also when I compared the Nifty with Ril and Crude the coorealtion of RIl iwth crude is more clear.
Now the crude has started to outperform the ril on normalised basis we can look to Reliance also start performing atleast for some time now.
Please do post comments below.
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