Some Notable Observations:

1.       The Pharma Industry stocks have been exhibiting negative correlation with other industry stocks (except with oil production stocks like ONGC and Coal Industry stocks like Coal India;

2.       IT Industry stocks, Telecom, Auto and Entertainment Industry stocks are more or less moving in same direction;

3.       Telecom Industry stocks have been showing high positive correlation with Auto, Metals, Ports, Banking stocks

4.       Auto Industry stocks are exhibiting Negative Correlation with Oil Production stocks, Coal stocks and Pharma;

5.       All metal stocks (Aluminum and Steel) are moving in same direction. But they have negative correlation with coal and oil production stocks;

6.       Conglomerate like Hindustan Unilever has been exhibiting high positive correlation with ports stock like Adani Ports and Telecom and Auto stocks;

7.       Banking stocks, Telecom and Auto Industry stocks show positive correlation;

8.       Values which are positive and nearer to 1 (like 0.6, 0.7,0.8 and 0.9) indicate positive correlation and such stocks are moving in same direction. This means , if a portfolio manager is holding stocks having positive correlation, either all the stock prices may up or all the stocks may decline)

9.       Values which are negative and nearer to “-1” (like -0.6, -0.7,-0.8 and -0.9) indicate negative correlation and such stocks are moving in different direction. This means , if a portfolio manager is holding stocks having negative correlation, if the price of one stock falls, the price of another stock may go up);

10.   Generally, from the risk management perspective, to keep the portfolio value intact, a portfolio is constructed with stocks with positive and negative correlation.