Correlation Between Bajaj Holdings and Hindustan Foods
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By analyzing existing cross correlation between Bajaj Holdings Investment and Hindustan Foods Limited, you can compare the effects of market volatilities on Bajaj Holdings and Hindustan Foods 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 Hindustan Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Holdings and Hindustan Foods.
Diversification Opportunities for Bajaj Holdings and Hindustan Foods
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bajaj and Hindustan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and Hindustan Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Foods 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 Hindustan Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Foods has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and Hindustan Foods go up and down completely randomly.
Pair Corralation between Bajaj Holdings and Hindustan Foods
Assuming the 90 days trading horizon Bajaj Holdings Investment is expected to generate 0.68 times more return on investment than Hindustan Foods. However, Bajaj Holdings Investment is 1.47 times less risky than Hindustan Foods. It trades about -0.03 of its potential returns per unit of risk. Hindustan Foods Limited is currently generating about -0.2 per unit of risk. If you would invest 1,052,500 in Bajaj Holdings Investment on August 31, 2024 and sell it today you would lose (19,855) from holding Bajaj Holdings Investment or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Bajaj Holdings Investment vs. Hindustan Foods Limited
Performance |
| Timeline |
| Bajaj Holdings Investment |
| Hindustan Foods |
Bajaj Holdings and Hindustan Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Holdings and Hindustan Foods
The main advantage of trading using opposite Bajaj Holdings and Hindustan Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Holdings position performs unexpectedly, Hindustan Foods 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 Hindustan Foods will offset losses from the drop in Hindustan Foods' long position.| Bajaj Holdings vs. ICICI Securities Limited | Bajaj Holdings vs. Nippon Life India | Bajaj Holdings vs. Fortis Healthcare Limited | Bajaj Holdings vs. ICICI Lombard General |
| Hindustan Foods vs. MRF Limited | Hindustan Foods vs. Bosch Limited | Hindustan Foods vs. Bajaj Holdings Investment | Hindustan Foods vs. Vardhman Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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