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Religare Commodities

Metals and Energy Research


Religare Enterprises Ltd
Religare Enterprises Ltd is a Ranbaxy promoter Northern Regional

group company Office

6 Regional offices Gujarat Regional


Office

25 Zonal Offices

Presence through more than 900 locations-Pan


India

Present across more than 320 Cities & Towns

Total group employees 6,500 plus


Mumbai Regional Eastern Regional
Office Office
Client Interfaces through the Retail, Wealth and
Institutional spectrums
Southern Regional
Among the largest Retail brokerage branch Office
network, going beyond Tier-I and Tier-II cities in Maharashtra Regional
India Office

Overseas presence with a representative office in


London, with aggressive plans of straddling other
parts of the globe in this financial year

Religare Data Centre has ISO/IEC 27001:2005


certification
Corporate Structure

Religare Finvest
Religare Wealth
Ltd
Religare Management
Securities Ltd Services Ltd

Religare Religare Capital


Commodities Markets Ltd
Ltd
Religare
Enterprises Ltd
Religare Finance
Religare
Ltd
Insurance
Broking Ltd

Religare Venture Religare Realty


Capital Pvt Ltd Ltd
Business Structure
Client Interface

Retail Spectrum Institutional Spectrum Wealth Spectrum

To cater to a large number of retail To Forge & build strong To provide customized wealth
clients by offering all products relationships with Corporate advisory services to High Net
under one roof through the Branch clients and Institutions worth (HNI) Individuals
Network and Online mode

Institutional Broking Wealth Advisory Services


Equity and Commodity Trading
Portfolio Management
Personal Finance Services Investment Banking Services
Mutual Funds Merchant Banking International Advisory Fund
Insurance Transaction Advisory Management Service (AFMS)
Savings Products Corporate Finance
Priority Equity Client Services
Personal Credit
Arts Initiative
Personal Loans
Loans against Shares

Online Investment
Operating Structure
Customized Solutions Key Facts

• Retail Division:
Retail Division – Looking after the retail investors or
individual clients. Either they trade
themselves or dealers trade on their
behalf on the basis of the research calls
given by the Religare research team after
the client’s confirmation.
Corporate Desk • Corporate Desk
Religare – This desk deals exclusively with the
Commodities Corporates, assisting them in the hedging

Ltd strategies or giving them the right


business solution for treasury investments
Arbitrage Desk • Arbitrage Desk
– This desk provides delivery-based Spot-
futures arbitrage to high net worth client
investments

• Mandi Division (Rural)


Mandi Division – This division specially caters to needs of
clients who are in rural markets, such as
farmers, traders, etc
Commodities Research

• Commodities Research has been classified into


two.
• Metals and Energy Research
• Agri Research

Scope
Research supports intraday traders to maximize
wealth on short-term volatility.
Research Prepares periodic reports for medium
term wealth maximization.
Research supports corporate and institutional team
for Presales and Postsales Research
Metal Model for High Frequency prediction

Variables Used

Name Variables

Gold gold

Silver silver

Copper copper_usd

Crude Oil Light sweet Crude_nymex

Euro/USD euro_usd

Dow Index dow

For gold the international interbank spot data is taken in ($/Oz),


silver data taken from international interbank spot in ($/Oz),
copper prices are taken from LME 3 months forward ($/ton),
crude oil taken from NYMEX ($/bbl), euro/usd is taken form spot
interbank refrence rate, Dow taken as INDEX data declared by
NYSE.
Correlation Matrix

Gold silver Copper euro_usd crude_nymex dow


Gold 1.0 0.8 0.6 0.8 0.4 0.7
silver 0.8 1.0 0.4 0.6 0.0 0.6
Copper 0.6 0.4 1.0 0.5 0.5 0.3
euro_usd 0.8 0.6 0.5 1.0 0.3 0.9

crude_nymex 0.4 0.0 0.5 0.3 1.0 0.7


dow 0.7 0.6 0.3 0.9 0.0 1.0

Correlation analysis shows that there is a good correlation between


gold and euro_usd and then gradually sloping towards silver and then
dow, copper and crude_nymex. Crude has shown the least correlation
to gold and then copper.
Regression results
Dependent Y Gold
Method Enter
Sample size 416
Coefficient of determination R2 0.9000
R2-adjusted 0.8988
Multiple correlation coefficient 0.9487
Residual standard deviation 13.3564

Independent variables Coefficient Std.Error t P


(Constant) -175.5467
silver 18.7541 0.7349 25.521 <0.0001
R2 shows a high
Copper -0.002053 0.0009474 -2.167 0.0308
degree of fit, and SD
crude_nymex 1.6793 0.1326 12.662 <0.0001 for residual is well
euro_usd 426.4275 36.6516 11.635 <0.0001 into range.
dow -0.005994 0.001758 -3.410 0.0007
Analysis and conclusion
50

40

30

20

10
Residual

0
9/5/2005 12/14/2005 3/24/2006 7/2/2006 10/10/2006 1/18/2007 4/28/2007 8/6/2007 11/14/2007

-10

-20

-30

-40

-50
Date

The model shows a greater degree of fit i.e R2 of 0.9 and hence
can be considered as a good model for gold price prediction.
The scatter diagram for residual fits shows that the predictor
maximum deviation ranges from -40 to +40 but well remain in the
median range of $2-4. The below scatter chart plots the residual
with date.
Scope for Future Work

•The selection of independent variables was subjected


to availability of high frequency data (daily) so more
independent variables should be introduced.
•Dow and euro_usd shows high correlation and hence
may pose a problem of multicolinearity but P (Probability
of hypothesis) has not eliminated either of the variables.
•Elimination of one of the variables changes the model,
but eventually elimination of Dow from the model keeps
the fitness intact, hence dow can be significantly
removed, future work will include addition of such not
correlated exogenous independent variable in the
equation.
•The model may be fitted with Indian data for making it
relevant to Indian market.
For Profit Trust Our Diligence
Metals and Energy Research