Correlation Between Medplus Health and Bajaj Healthcare

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

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

Diversification Opportunities for Medplus Health and Bajaj Healthcare

0.57

Correlation Coefficient

Medplus Health  Bajaj Healthcare

Very weak diversification

The 3 months correlation between Medplus and Bajaj is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Medplus Health Services and Bajaj Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Healthcare and Medplus Health 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 Medplus Health Services are associated (or correlated) with Bajaj Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Healthcare has no effect on the direction of Medplus Health i.e., Medplus Health and Bajaj Healthcare go up and down completely randomly.

Pair Corralation between Medplus Health and Bajaj Healthcare

Assuming the 90 days trading horizon Medplus Health Services is expected to generate 0.64 times more return on investment than Bajaj Healthcare. However, Medplus Health Services is 1.57 times less risky than Bajaj Healthcare. It trades about 0.12 of its potential returns per unit of risk. Bajaj Healthcare Limited is currently generating about 0.03 per unit of risk. If you would invest  69,875  in Medplus Health Services on September 3, 2024 and sell it today you would earn a total of  8,395  from holding Medplus Health Services or generate 12.01% return on investment over 90 days.

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

Medplus Health Services  vs.  Bajaj Healthcare Limited

Medplus Health Services

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medplus Health Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Medplus Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bajaj Healthcare

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bajaj Healthcare Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Bajaj Healthcare is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Medplus Health and Bajaj Healthcare

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

The idea behind Medplus Health Services and Bajaj Healthcare Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.