Correlation Between Kotak Mahindra and Bajaj Holdings
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By analyzing existing cross correlation between Kotak Mahindra Bank and Bajaj Holdings Investment, you can compare the effects of market volatilities on Kotak Mahindra 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 Kotak Mahindra with a short position of Bajaj Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and Bajaj Holdings.
Diversification Opportunities for Kotak Mahindra and Bajaj Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kotak and Bajaj is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank 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 Kotak Mahindra 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 Kotak Mahindra Bank 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 Kotak Mahindra i.e., Kotak Mahindra and Bajaj Holdings go up and down completely randomly.
Pair Corralation between Kotak Mahindra and Bajaj Holdings
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 0.57 times more return on investment than Bajaj Holdings. However, Kotak Mahindra Bank is 1.76 times less risky than Bajaj Holdings. It trades about 0.18 of its potential returns per unit of risk. Bajaj Holdings Investment is currently generating about -0.01 per unit of risk. If you would invest 174,205 in Kotak Mahindra Bank on October 24, 2024 and sell it today you would earn a total of 15,125 from holding Kotak Mahindra Bank or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. Bajaj Holdings Investment
Performance |
| Timeline |
| Kotak Mahindra Bank |
| Bajaj Holdings Investment |
Kotak Mahindra and Bajaj Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and Bajaj Holdings
The main advantage of trading using opposite Kotak Mahindra and Bajaj Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra 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.| Kotak Mahindra vs. Reliance Industries Limited | Kotak Mahindra vs. HDFC Bank Limited | Kotak Mahindra vs. Kingfa Science Technology | Kotak Mahindra vs. Rico Auto Industries |
| Bajaj Holdings vs. Sintex Plastics Technology | Bajaj Holdings vs. FCS Software Solutions | Bajaj Holdings vs. Bank of Maharashtra | Bajaj Holdings vs. Kotak Mahindra Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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