Correlation Between Popular Vehicles and NIIT

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

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

Diversification Opportunities for Popular Vehicles and NIIT

0.88

Correlation Coefficient

Popular Vehicles  NIIT

Very poor diversification

The 3 months correlation between Popular and NIIT is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Popular Vehicles and and NIIT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT Limited and Popular Vehicles 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 Popular Vehicles and are associated (or correlated) with NIIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT Limited has no effect on the direction of Popular Vehicles i.e., Popular Vehicles and NIIT go up and down completely randomly.

Pair Corralation between Popular Vehicles and NIIT

Assuming the 90 days trading horizon Popular Vehicles and is expected to under-perform the NIIT. But the stock apears to be less risky and, when comparing its historical volatility, Popular Vehicles and is 1.61 times less risky than NIIT. The stock trades about -0.3 of its potential returns per unit of risk. The NIIT Limited is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  18,514  in NIIT Limited on December 29, 2024 and sell it today you would lose (6,240) from holding NIIT Limited or give up 33.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Popular Vehicles and  vs.  NIIT Limited

Popular Vehicles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Popular Vehicles and 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 basic 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.

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.

Pair Trading with Popular Vehicles and NIIT

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

The idea behind Popular Vehicles and and NIIT 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 Commodity Directory module to find actively traded commodities issued by global exchanges.