Correlation Between Bajaj Finance and Indian Railway
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By analyzing existing cross correlation between Bajaj Finance Limited and Indian Railway Finance, you can compare the effects of market volatilities on Bajaj Finance and Indian Railway 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 Finance with a short position of Indian Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Finance and Indian Railway.
Diversification Opportunities for Bajaj Finance and Indian Railway
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bajaj and Indian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Finance Limited and Indian Railway Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Railway Finance and Bajaj Finance 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 Finance Limited are associated (or correlated) with Indian Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Railway Finance has no effect on the direction of Bajaj Finance i.e., Bajaj Finance and Indian Railway go up and down completely randomly.
Pair Corralation between Bajaj Finance and Indian Railway
Assuming the 90 days trading horizon Bajaj Finance Limited is expected to under-perform the Indian Railway. But the stock apears to be less risky and, when comparing its historical volatility, Bajaj Finance Limited is 1.55 times less risky than Indian Railway. The stock trades about -0.16 of its potential returns per unit of risk. The Indian Railway Finance is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 15,689 in Indian Railway Finance on September 2, 2024 and sell it today you would lose (755.00) from holding Indian Railway Finance or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bajaj Finance Limited vs. Indian Railway Finance
Performance |
| Timeline |
| Bajaj Finance Limited |
| Indian Railway Finance |
Bajaj Finance and Indian Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bajaj Finance and Indian Railway
The main advantage of trading using opposite Bajaj Finance and Indian Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Finance position performs unexpectedly, Indian Railway 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 Indian Railway will offset losses from the drop in Indian Railway's long position.| Bajaj Finance vs. NMDC Steel Limited | Bajaj Finance vs. Univa Foods Limited | Bajaj Finance vs. ADF Foods Limited | Bajaj Finance vs. Vraj Iron and |
| Indian Railway vs. Agro Tech Foods | Indian Railway vs. VIP Clothing Limited | Indian Railway vs. S P Apparels | Indian Railway vs. AAA Technologies 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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