Correlation Between Quess Corp and Bajaj Holdings

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

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

Diversification Opportunities for Quess Corp and Bajaj Holdings

0.0

Correlation Coefficient

Quess Corp  Bajaj Holdings

Pay attention - limited upside

The 3 months correlation between Quess and Bajaj is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quess Corp Limited and Bajaj Holdings Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Holdings Investment and Quess Corp 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 Quess Corp Limited are associated (or correlated) with Bajaj Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Holdings Investment has no effect on the direction of Quess Corp i.e., Quess Corp and Bajaj Holdings go up and down completely randomly.

Pair Corralation between Quess Corp and Bajaj Holdings

Assuming the 90 days trading horizon Quess Corp is expected to generate 4.71 times less return on investment than Bajaj Holdings. But when comparing it to its historical volatility, Quess Corp Limited is 1.3 times less risky than Bajaj Holdings. It trades about 0.02 of its potential returns per unit of risk. Bajaj Holdings Investment is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,109,400  in Bajaj Holdings Investment on December 26, 2024 and sell it today you would earn a total of  142,750  from holding Bajaj Holdings Investment or generate 12.87% return on investment over 90 days.

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

Quess Corp Limited  vs.  Bajaj Holdings Investment

Quess Corp Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quess Corp Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Quess Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, Bajaj Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quess Corp and Bajaj Holdings

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

The idea behind Quess Corp Limited and Bajaj Holdings Investment 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..