Correlation Between UFO Moviez and Bajaj Holdings

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

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

Diversification Opportunities for UFO Moviez and Bajaj Holdings

-0.54

Correlation Coefficient

UFO Moviez  Bajaj Holdings

Excellent diversification

The 3 months correlation between UFO and Bajaj is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding UFO Moviez India 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 UFO Moviez 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 UFO Moviez India 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 UFO Moviez i.e., UFO Moviez and Bajaj Holdings go up and down completely randomly.

Pair Corralation between UFO Moviez and Bajaj Holdings

Assuming the 90 days trading horizon UFO Moviez India is expected to under-perform the Bajaj Holdings. In addition to that, UFO Moviez is 1.13 times more volatile than Bajaj Holdings Investment. It trades about -0.16 of its total potential returns per unit of risk. Bajaj Holdings Investment is currently generating about 0.07 per unit of volatility. If you would invest  1,036,550  in Bajaj Holdings Investment on December 2, 2024 and sell it today you would earn a total of  120,885  from holding Bajaj Holdings Investment or generate 11.66% return on investment over 90 days.

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

UFO Moviez India  vs.  Bajaj Holdings Investment

UFO Moviez India

Risk-Adjusted Performance

Very Weak

Over the last 90 days UFO Moviez India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental 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.

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

Pair Trading with UFO Moviez and Bajaj Holdings

The main advantage of trading using opposite UFO Moviez and Bajaj Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UFO Moviez 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 UFO Moviez India 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.