Correlation Between Bajaj Holdings and ITI
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By analyzing existing cross correlation between Bajaj Holdings Investment and ITI Limited, you can compare the effects of market volatilities on Bajaj Holdings and ITI 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 ITI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Holdings and ITI.
Diversification Opportunities for Bajaj Holdings and ITI
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bajaj and ITI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and ITI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITI Limited 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 ITI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITI Limited has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and ITI go up and down completely randomly.
Pair Corralation between Bajaj Holdings and ITI
Assuming the 90 days trading horizon Bajaj Holdings is expected to generate 2.52 times less return on investment than ITI. But when comparing it to its historical volatility, Bajaj Holdings Investment is 2.01 times less risky than ITI. It trades about 0.07 of its potential returns per unit of risk. ITI Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 29,567 in ITI Limited on October 29, 2024 and sell it today you would earn a total of 4,868 from holding ITI Limited or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Bajaj Holdings Investment vs. ITI Limited
Performance |
| Timeline |
| Bajaj Holdings Investment |
| ITI Limited |
Bajaj Holdings and ITI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Holdings and ITI
The main advantage of trading using opposite Bajaj Holdings and ITI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Holdings position performs unexpectedly, ITI 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 ITI will offset losses from the drop in ITI's long position.| Bajaj Holdings vs. Consolidated Construction Consortium | Bajaj Holdings vs. Pritish Nandy Communications | Bajaj Holdings vs. Garuda Construction Engineering | Bajaj Holdings vs. Bigbloc Construction Limited |
| ITI vs. Cholamandalam Investment and | ITI vs. HDFC Asset Management | ITI vs. Spencers Retail Limited | ITI vs. V2 Retail 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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