Correlation Between NIIT and One 97

Can any of the company-specific risk be diversified away by investing in both NIIT and One 97 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 NIIT and One 97 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NIIT Limited and One 97 Communications, you can compare the effects of market volatilities on NIIT and One 97 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 NIIT with a short position of One 97. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIIT and One 97.

Diversification Opportunities for NIIT and One 97

0.94

Correlation Coefficient

NIIT  One 97

Almost no diversification

The 3 months correlation between NIIT and One is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NIIT Limited and One 97 Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One 97 Communications and NIIT 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 NIIT Limited are associated (or correlated) with One 97. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One 97 Communications has no effect on the direction of NIIT i.e., NIIT and One 97 go up and down completely randomly.

Pair Corralation between NIIT and One 97

Assuming the 90 days trading horizon NIIT Limited is expected to under-perform the One 97. In addition to that, NIIT is 1.14 times more volatile than One 97 Communications. It trades about -0.15 of its total potential returns per unit of risk. One 97 Communications is currently generating about -0.11 per unit of volatility. If you would invest  102,090  in One 97 Communications on December 30, 2024 and sell it today you would lose (23,745) from holding One 97 Communications or give up 23.26% of portfolio value over 90 days.

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

NIIT Limited  vs.  One 97 Communications

NIIT Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days NIIT Limited 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 essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

One 97 Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days One 97 Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NIIT and One 97

The main advantage of trading using opposite NIIT and One 97 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIIT position performs unexpectedly, One 97 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 One 97 will offset losses from the drop in One 97's long position.

The idea behind NIIT Limited and One 97 Communications 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.