Correlation Between Bajaj Healthcare and Praxis Home
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By analyzing existing cross correlation between Bajaj Healthcare Limited and Praxis Home Retail, you can compare the effects of market volatilities on Bajaj Healthcare and Praxis Home 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 Praxis Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Healthcare and Praxis Home.
Diversification Opportunities for Bajaj Healthcare and Praxis Home
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bajaj and Praxis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Healthcare Limited and Praxis Home Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Home Retail 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 Praxis Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Home Retail has no effect on the direction of Bajaj Healthcare i.e., Bajaj Healthcare and Praxis Home go up and down completely randomly.
Pair Corralation between Bajaj Healthcare and Praxis Home
Assuming the 90 days trading horizon Bajaj Healthcare Limited is expected to generate 2.54 times more return on investment than Praxis Home. However, Bajaj Healthcare is 2.54 times more volatile than Praxis Home Retail. It trades about 0.26 of its potential returns per unit of risk. Praxis Home Retail is currently generating about -0.25 per unit of risk. If you would invest 39,150 in Bajaj Healthcare Limited on September 23, 2024 and sell it today you would earn a total of 14,240 from holding Bajaj Healthcare Limited or generate 36.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bajaj Healthcare Limited vs. Praxis Home Retail
Performance |
Timeline |
Bajaj Healthcare |
Praxis Home Retail |
Bajaj Healthcare and Praxis Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bajaj Healthcare and Praxis Home
The main advantage of trading using opposite Bajaj Healthcare and Praxis Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Healthcare position performs unexpectedly, Praxis Home 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 Praxis Home will offset losses from the drop in Praxis Home's long position.Bajaj Healthcare vs. Jindal Poly Investment | ||
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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