Correlation Between Bajaj Healthcare and UFO Moviez

Can any of the company-specific risk be diversified away by investing in both Bajaj Healthcare and UFO Moviez at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bajaj Healthcare and UFO Moviez into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bajaj Healthcare Limited and UFO Moviez India, you can compare the effects of market volatilities on Bajaj Healthcare and UFO Moviez 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 Healthcare with a short position of UFO Moviez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Healthcare and UFO Moviez.

Diversification Opportunities for Bajaj Healthcare and UFO Moviez

-0.11

Correlation Coefficient

Bajaj Healthcare  UFO Moviez

Good diversification

The 3 months correlation between Bajaj and UFO is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Healthcare Limited and UFO Moviez India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFO Moviez India and Bajaj Healthcare 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 Healthcare Limited are associated (or correlated) with UFO Moviez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFO Moviez India has no effect on the direction of Bajaj Healthcare i.e., Bajaj Healthcare and UFO Moviez go up and down completely randomly.

Pair Corralation between Bajaj Healthcare and UFO Moviez

Assuming the 90 days trading horizon Bajaj Healthcare Limited is expected to generate 1.09 times more return on investment than UFO Moviez. However, Bajaj Healthcare is 1.09 times more volatile than UFO Moviez India. It trades about 0.03 of its potential returns per unit of risk. UFO Moviez India is currently generating about 0.02 per unit of risk. If you would invest  44,241  in Bajaj Healthcare Limited on September 20, 2024 and sell it today you would earn a total of  11,564  from holding Bajaj Healthcare Limited or generate 26.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

Bajaj Healthcare Limited  vs.  UFO Moviez India

Bajaj Healthcare

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bajaj Healthcare Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Bajaj Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

UFO Moviez India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UFO Moviez India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bajaj Healthcare and UFO Moviez

The main advantage of trading using opposite Bajaj Healthcare and UFO Moviez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bajaj Healthcare position performs unexpectedly, UFO Moviez 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 UFO Moviez will offset losses from the drop in UFO Moviez's long position.

The idea behind Bajaj Healthcare Limited and UFO Moviez India pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.