Correlation Between Bajaj Holdings and Trent
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By analyzing existing cross correlation between Bajaj Holdings Investment and Trent Limited, you can compare the effects of market volatilities on Bajaj Holdings and Trent 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 Trent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Holdings and Trent.
Diversification Opportunities for Bajaj Holdings and Trent
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bajaj and Trent is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and Trent Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trent 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 Trent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trent Limited has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and Trent go up and down completely randomly.
Pair Corralation between Bajaj Holdings and Trent
Assuming the 90 days trading horizon Bajaj Holdings Investment is expected to generate 1.99 times more return on investment than Trent. However, Bajaj Holdings is 1.99 times more volatile than Trent Limited. It trades about -0.02 of its potential returns per unit of risk. Trent Limited is currently generating about -0.26 per unit of risk. If you would invest 1,128,000 in Bajaj Holdings Investment on October 20, 2024 and sell it today you would lose (47,790) from holding Bajaj Holdings Investment or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bajaj Holdings Investment vs. Trent Limited
Performance |
| Timeline |
| Bajaj Holdings Investment |
| Trent Limited |
Bajaj Holdings and Trent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Holdings and Trent
The main advantage of trading using opposite Bajaj Holdings and Trent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Holdings position performs unexpectedly, Trent 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 Trent will offset losses from the drop in Trent's long position.| Bajaj Holdings vs. Pilani Investment and | Bajaj Holdings vs. Tata Communications Limited | Bajaj Holdings vs. TECIL Chemicals and | Bajaj Holdings vs. Tamilnadu Telecommunication Limited |
| Trent vs. Kingfa Science Technology | Trent vs. Rico Auto Industries | Trent vs. GACM Technologies Limited | Trent vs. COSMO FIRST 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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