Correlation Between Bajaj Healthcare and MRF
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By analyzing existing cross correlation between Bajaj Healthcare Limited and MRF Limited, you can compare the effects of market volatilities on Bajaj Healthcare and MRF 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 Bajaj Healthcare with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Healthcare and MRF.
Diversification Opportunities for Bajaj Healthcare and MRF
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bajaj and MRF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Healthcare Limited and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and Bajaj Healthcare 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 Bajaj Healthcare Limited are associated (or correlated) with MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of Bajaj Healthcare i.e., Bajaj Healthcare and MRF go up and down completely randomly.
Pair Corralation between Bajaj Healthcare and MRF
Assuming the 90 days trading horizon Bajaj Healthcare Limited is expected to generate 2.24 times more return on investment than MRF. However, Bajaj Healthcare is 2.24 times more volatile than MRF Limited. It trades about 0.17 of its potential returns per unit of risk. MRF Limited is currently generating about 0.06 per unit of risk. 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 Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bajaj Healthcare Limited vs. MRF Limited
Performance |
| Timeline |
| Bajaj Healthcare |
| MRF Limited |
Bajaj Healthcare and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Healthcare and MRF
The main advantage of trading using opposite Bajaj Healthcare and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Healthcare position performs unexpectedly, MRF 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 MRF will offset losses from the drop in MRF's long position.| Bajaj Healthcare vs. MRF Limited | Bajaj Healthcare vs. Honeywell Automation India | Bajaj Healthcare vs. Page Industries Limited | Bajaj Healthcare vs. 3M India Limited |
| MRF vs. Avonmore Capital Management | MRF vs. Spencers Retail Limited | MRF vs. Beta Drugs | MRF vs. Aarey Drugs Pharmaceuticals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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