Religare Commodities

Metals and Energy Research

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

company

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

Client Interfaces through the Retail, Wealth and Institutional Mumbai Regional Office Eastern Regional Office

spectrums

Among the largest Retail brokerage branch network, going Southern Regional Office
beyond Tier-I and Tier-II cities in India
Maharashtra Regional
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 Securities Management
Ltd Services Ltd

Religare Capital
Religare Markets Ltd
Commodities Ltd
Religare
Enterprises Ltd
Religare Finance
Religare Insurance Ltd
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 under relationships with Corporate clients advisory services to High Net worth
one roof through the Branch Network and Institutions (HNI) Individuals
and Online mode

Institutional Broking Wealth Advisory Services

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

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
– This desk deals exclusively with the
Religare Corporates, assisting them in the hedging
Commodities 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)

– This division specially caters to needs of clients
who are in rural markets, such as farmers,
Mandi Division 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
R e s id u a l

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