Correlation Between Bajaj Holdings and EMBASSY OFFICE

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

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

Diversification Opportunities for Bajaj Holdings and EMBASSY OFFICE

0.77

Correlation Coefficient

Bajaj Holdings  EMBASSY OFFICE

Poor diversification

The 3 months correlation between Bajaj and EMBASSY is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bajaj Holdings Investment and EMBASSY OFFICE PARKS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBASSY OFFICE PARKS and Bajaj Holdings 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 Bajaj Holdings Investment are associated (or correlated) with EMBASSY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBASSY OFFICE PARKS has no effect on the direction of Bajaj Holdings i.e., Bajaj Holdings and EMBASSY OFFICE go up and down completely randomly.

Pair Corralation between Bajaj Holdings and EMBASSY OFFICE

Assuming the 90 days trading horizon Bajaj Holdings Investment is expected to generate 2.37 times more return on investment than EMBASSY OFFICE. However, Bajaj Holdings is 2.37 times more volatile than EMBASSY OFFICE PARKS. It trades about 0.12 of its potential returns per unit of risk. EMBASSY OFFICE PARKS is currently generating about 0.14 per unit of risk. If you would invest  1,212,647  in Bajaj Holdings Investment on April 25, 2025 and sell it today you would earn a total of  184,653  from holding Bajaj Holdings Investment or generate 15.23% return on investment over 90 days.

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

Bajaj Holdings Investment  vs.  EMBASSY OFFICE PARKS

Bajaj Holdings Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bajaj Holdings Investment are ranked lower than 9 (%) 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.

EMBASSY OFFICE PARKS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMBASSY OFFICE PARKS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, EMBASSY OFFICE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bajaj Holdings and EMBASSY OFFICE

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

The idea behind Bajaj Holdings Investment and EMBASSY OFFICE PARKS 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.