Correlation Between MRF and Bajaj Holdings
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By analyzing existing cross correlation between MRF Limited and Bajaj Holdings Investment, you can compare the effects of market volatilities on MRF 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 MRF with a short position of Bajaj Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRF and Bajaj Holdings.
Diversification Opportunities for MRF and Bajaj Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MRF and Bajaj is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited 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 MRF 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 MRF Limited 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 MRF i.e., MRF and Bajaj Holdings go up and down completely randomly.
Pair Corralation between MRF and Bajaj Holdings
Assuming the 90 days trading horizon MRF Limited is expected to under-perform the Bajaj Holdings. But the stock apears to be less risky and, when comparing its historical volatility, MRF Limited is 1.18 times less risky than Bajaj Holdings. The stock trades about -0.26 of its potential returns per unit of risk. The Bajaj Holdings Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,046,900 in Bajaj Holdings Investment on August 28, 2024 and sell it today you would earn a total of 12,255 from holding Bajaj Holdings Investment or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
MRF Limited vs. Bajaj Holdings Investment
Performance |
| Timeline |
| MRF Limited |
| Bajaj Holdings Investment |
MRF and Bajaj Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRF and Bajaj Holdings
The main advantage of trading using opposite MRF and Bajaj Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF 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.| MRF vs. JGCHEMICALS LIMITED | MRF vs. Pilani Investment and | MRF vs. DMCC SPECIALITY CHEMICALS | MRF vs. Tata Investment |
| Bajaj Holdings vs. Reliance Industries Limited | Bajaj Holdings vs. State Bank of | Bajaj Holdings vs. HDFC Bank Limited | 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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