Correlation Between Page Industries and Bajaj Finance

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

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

Diversification Opportunities for Page Industries and Bajaj Finance

0.47

Correlation Coefficient

Page Industries  Bajaj Finance

Very weak diversification

The 3 months correlation between Page and Bajaj is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Page Industries Limited and Bajaj Finance Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Finance Limited and Page Industries 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 Page Industries Limited are associated (or correlated) with Bajaj Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Finance Limited has no effect on the direction of Page Industries i.e., Page Industries and Bajaj Finance go up and down completely randomly.

Pair Corralation between Page Industries and Bajaj Finance

Assuming the 90 days trading horizon Page Industries is expected to generate 2.07 times less return on investment than Bajaj Finance. In addition to that, Page Industries is 1.39 times more volatile than Bajaj Finance Limited. It trades about 0.07 of its total potential returns per unit of risk. Bajaj Finance Limited is currently generating about 0.21 per unit of volatility. If you would invest  91,650  in Bajaj Finance Limited on April 25, 2025 and sell it today you would earn a total of  5,180  from holding Bajaj Finance Limited or generate 5.65% return on investment over 90 days.

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

Page Industries Limited  vs.  Bajaj Finance Limited

Page Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Page Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Bajaj Finance Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bajaj Finance Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bajaj Finance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Page Industries and Bajaj Finance

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

The idea behind Page Industries Limited and Bajaj Finance 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.