CO-RELATION ANALYSIS

[Nitin Bhatia]

SIR
BY DOING THE ANALYSIS ITS CLEAR THAT AS IV WILL INCREASE ON CALL SIDE NIFTY WILL GO UP AS THE CORELATION ON PUT SIDE IS WEAK. NOW I HAVE DONE CORELATION ANALYSIS OF IV AND PREMIUM ON CLOSING BASIS OF NIFTY ON CALL SIDE WHICH INDICATES 0.88 WHICH MEANS STRONG POSITIVE SO THUS CAN WE CONCLUDE THAT AS IV WILL INCREASE THE PREMIUM WILL INCREASE AND NIFTY WILL GO UP.
PLEASE CLARIFY
THANK U

[Nitin Bhatia]

AND CORRELATION OF PUT IV & PREMIUM IS ALSO VERY STRONG POSITIVE 0.97 WHAT DOES THIS INDICATE PLEASE ANYONE CAN CLARIFY
THANK U

[Nitin Bhatia]

Call side correlation should be positive and put side correlation should be negative to go up then only you can conclude that nifty will definitely go up

[Nitin Bhatia]

plz tell me what is the logic of corelation 0.88 and other numbers and this number can change in future

[Nitin Bhatia]

hi,
atul the correlation coefficient on call side at a particular iv and premium by doing ananlysis was 0.88 which will definately change time to time

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