Correlation Between Indian Oil and Bajaj Holdings
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By analyzing existing cross correlation between Indian Oil and Bajaj Holdings Investment, you can compare the effects of market volatilities on Indian Oil and Bajaj Holdings 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 Indian Oil with a short position of Bajaj Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Oil and Bajaj Holdings.
Diversification Opportunities for Indian Oil and Bajaj Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indian and Bajaj is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Indian Oil and Bajaj Holdings Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Holdings Investment and Indian Oil 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 Indian Oil are associated (or correlated) with Bajaj Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Holdings Investment has no effect on the direction of Indian Oil i.e., Indian Oil and Bajaj Holdings go up and down completely randomly.
Pair Corralation between Indian Oil and Bajaj Holdings
Assuming the 90 days trading horizon Indian Oil is expected to under-perform the Bajaj Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Indian Oil is 2.22 times less risky than Bajaj Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The Bajaj Holdings Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,126,160 in Bajaj Holdings Investment on October 28, 2024 and sell it today you would earn a total of 2,850 from holding Bajaj Holdings Investment or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Oil vs. Bajaj Holdings Investment
Performance |
| Timeline |
| Indian Oil |
| Bajaj Holdings Investment |
Indian Oil and Bajaj Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Oil and Bajaj Holdings
The main advantage of trading using opposite Indian Oil and Bajaj Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Oil position performs unexpectedly, Bajaj Holdings 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 Bajaj Holdings will offset losses from the drop in Bajaj Holdings' long position.| Indian Oil vs. Gujarat Lease Financing | Indian Oil vs. Bombay Burmah Trading | Indian Oil vs. AUTHUM INVESTMENT INFRASTRUCTU | Indian Oil vs. Sapphire Foods India |
| Bajaj Holdings vs. Reliance Industries Limited | Bajaj Holdings vs. Life Insurance | Bajaj Holdings vs. Indian Oil | Bajaj Holdings vs. Oil Natural Gas |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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