Correlation Between 3M India and Bajaj Healthcare
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By analyzing existing cross correlation between 3M India Limited and Bajaj Healthcare Limited, you can compare the effects of market volatilities on 3M India and Bajaj Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 3M India with a short position of Bajaj Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M India and Bajaj Healthcare.
Diversification Opportunities for 3M India and Bajaj Healthcare
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 3MINDIA and Bajaj is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding 3M India Limited and Bajaj Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Healthcare and 3M India is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on 3M India Limited are associated (or correlated) with Bajaj Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Healthcare has no effect on the direction of 3M India i.e., 3M India and Bajaj Healthcare go up and down completely randomly.
Pair Corralation between 3M India and Bajaj Healthcare
Assuming the 90 days trading horizon 3M India Limited is expected to under-perform the Bajaj Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, 3M India Limited is 1.31 times less risky than Bajaj Healthcare. The stock trades about -0.15 of its potential returns per unit of risk. The Bajaj Healthcare Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 36,195 in Bajaj Healthcare Limited on August 31, 2024 and sell it today you would earn a total of 3,540 from holding Bajaj Healthcare Limited or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M India Limited vs. Bajaj Healthcare Limited
Performance |
| Timeline |
| 3M India Limited |
| Bajaj Healthcare |
3M India and Bajaj Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M India and Bajaj Healthcare
The main advantage of trading using opposite 3M India and Bajaj Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M India position performs unexpectedly, Bajaj Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bajaj Healthcare will offset losses from the drop in Bajaj Healthcare's long position.| 3M India vs. Apollo Hospitals Enterprise | 3M India vs. Rajnandini Metal Limited | 3M India vs. Healthcare Global Enterprises | 3M India vs. Madhav Copper Limited |
| Bajaj Healthcare vs. MRF Limited | Bajaj Healthcare vs. Honeywell Automation India | Bajaj Healthcare vs. Page Industries Limited | Bajaj Healthcare vs. 3M India Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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