Correlation Between Bajaj Holdings and Elgi Rubber
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By analyzing existing cross correlation between Bajaj Holdings Investment and Elgi Rubber, you can compare the effects of market volatilities on Bajaj Holdings and Elgi Rubber 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 Holdings with a short position of Elgi Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Holdings and Elgi Rubber.
Diversification Opportunities for Bajaj Holdings and Elgi Rubber
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bajaj and Elgi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and Elgi Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elgi Rubber and Bajaj Holdings 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 Holdings Investment are associated (or correlated) with Elgi Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elgi Rubber has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and Elgi Rubber go up and down completely randomly.
Pair Corralation between Bajaj Holdings and Elgi Rubber
Assuming the 90 days trading horizon Bajaj Holdings Investment is expected to under-perform the Elgi Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Bajaj Holdings Investment is 2.77 times less risky than Elgi Rubber. The stock trades about -0.03 of its potential returns per unit of risk. The Elgi Rubber is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,900 in Elgi Rubber on September 3, 2024 and sell it today you would earn a total of 347.00 from holding Elgi Rubber or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Bajaj Holdings Investment vs. Elgi Rubber
Performance |
| Timeline |
| Bajaj Holdings Investment |
| Elgi Rubber |
Bajaj Holdings and Elgi Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Holdings and Elgi Rubber
The main advantage of trading using opposite Bajaj Holdings and Elgi Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Holdings position performs unexpectedly, Elgi Rubber 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 Elgi Rubber will offset losses from the drop in Elgi Rubber's long position.| Bajaj Holdings vs. The Investment Trust | Bajaj Holdings vs. Hathway Cable Datacom | Bajaj Holdings vs. Kalyani Investment | Bajaj Holdings vs. Industrial Investment Trust |
| Elgi Rubber vs. Bajaj Holdings Investment | Elgi Rubber vs. Shipping | Elgi Rubber vs. Indo Borax Chemicals | Elgi Rubber vs. Kingfa Science Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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