Correlation Between Bajaj Holdings and NIIT LEARNING

Can any of the company-specific risk be diversified away by investing in both Bajaj Holdings and NIIT LEARNING 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 Holdings and NIIT LEARNING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bajaj Holdings Investment and NIIT LEARNING SYSTEMS, you can compare the effects of market volatilities on Bajaj Holdings and NIIT LEARNING 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 Holdings with a short position of NIIT LEARNING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bajaj Holdings and NIIT LEARNING.

Diversification Opportunities for Bajaj Holdings and NIIT LEARNING

-0.24

Correlation Coefficient

Bajaj Holdings  NIIT LEARNING

Very good diversification

The 3 months correlation between Bajaj and NIIT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and NIIT LEARNING SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT LEARNING SYSTEMS and Bajaj Holdings 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 Holdings Investment are associated (or correlated) with NIIT LEARNING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT LEARNING SYSTEMS has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and NIIT LEARNING go up and down completely randomly.

Pair Corralation between Bajaj Holdings and NIIT LEARNING

Assuming the 90 days trading horizon Bajaj Holdings Investment is expected to generate 1.62 times more return on investment than NIIT LEARNING. However, Bajaj Holdings is 1.62 times more volatile than NIIT LEARNING SYSTEMS. It trades about 0.06 of its potential returns per unit of risk. NIIT LEARNING SYSTEMS is currently generating about -0.1 per unit of risk. If you would invest  1,063,035  in Bajaj Holdings Investment on December 3, 2024 and sell it today you would earn a total of  94,400  from holding Bajaj Holdings Investment or generate 8.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bajaj Holdings Investment  vs.  NIIT LEARNING SYSTEMS

Bajaj Holdings Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bajaj Holdings Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, Bajaj Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NIIT LEARNING SYSTEMS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NIIT LEARNING SYSTEMS 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 primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bajaj Holdings and NIIT LEARNING

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

The idea behind Bajaj Holdings Investment and NIIT LEARNING SYSTEMS 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.