SECTOR CORRELATION · APRIL 2026, 6-MONTH WINDOW

NIFTY sector correlation — for diversification + pair trading.

Reference snapshot of Pearson correlation of daily returns across 10 NIFTY sector indices over a recent 6-month window. Use it to identify pair-trade candidates (historically correlated but recently decoupled) or to check whether your "diversified" portfolio is actually concentrated in the same risk factor. Correlations drift — treat as directional, not precise.

NIFTY sector correlation snapshot · as of April 2026, 6-month window. Curated reference — verify against the authoritative source before making any investment decision. Refreshed periodically, not continuously.

Sources: NSE sector indices · NSE daily closes (historical)

Sector	NIFTY	BANK	IT	AUTO	PHARMA	FMCG	METAL	ENERGY	REALTY	PSU
NIFTY 50	1.00	0.89	0.76	0.72	0.54	0.63	0.68	0.74	0.71	0.74
Nifty Bank	0.89	1.00	0.61	0.78	0.42	0.52	0.64	0.70	0.76	0.88
Nifty IT	0.76	0.61	1.00	0.44	0.38	0.46	0.32	0.41	0.49	0.48
Nifty Auto	0.72	0.78	0.44	1.00	0.49	0.58	0.62	0.67	0.74	0.71
Nifty Pharma	0.54	0.42	0.38	0.49	1.00	0.47	0.28	0.34	0.41	0.38
Nifty FMCG	0.63	0.52	0.46	0.58	0.47	1.00	0.36	0.52	0.48	0.49
Nifty Metal	0.68	0.64	0.32	0.62	0.28	0.36	1.00	0.72	0.59	0.61
Nifty Energy	0.74	0.70	0.41	0.67	0.34	0.52	0.72	1.00	0.63	0.66
Nifty Realty	0.71	0.76	0.49	0.74	0.41	0.48	0.59	0.63	1.00	0.74
Nifty PSU Bank	0.74	0.88	0.48	0.71	0.38	0.49	0.61	0.66	0.74	1.00

≥ 0.85 very strong — concentration risk0.70 – 0.84 strong0.55 – 0.69 moderate0.35 – 0.54 weak0.15 – 0.34 diversifying< 0 inverse — natural hedge

Red ≈ sectors that move together (stacking these in a portfolio = one concentrated bet). Green ≈ natural diversifiers (combining these spreads risk).

Most correlated — watch for concentration

Holding both gives you one concentrated exposure. Useful for pair-trade setups when they decouple.

NIFTY 50 × Nifty Bank0.89
Nifty Bank × Nifty PSU Bank0.88
Nifty Bank × Nifty Auto0.78
NIFTY 50 × Nifty IT0.76
Nifty Bank × Nifty Realty0.76

Least correlated — natural diversifiers

Combine these when building multi-sector baskets. Lower portfolio volatility for the same expected return.

Nifty Pharma × Nifty Metal0.28
Nifty IT × Nifty Metal0.32
Nifty Pharma × Nifty Energy0.34
Nifty FMCG × Nifty Metal0.36
Nifty IT × Nifty Pharma0.38

1-year return + volatility by sector

Sector	1Y return	Ann. vol	Return / vol	Chart
Nifty Realty NIFTYREALTY	+32.6%	32.8%	0.99	Chart →
Nifty PSU Bank NIFTYPSUBANK	+28.4%	26.2%	1.08	Chart →
Nifty Metal NIFTYMETAL	+24.1%	28.4%	0.85	Chart →
Nifty Pharma NIFTYPHARMA	+22.8%	19.8%	1.15	Chart →
Nifty Auto NIFTYAUTO	+18.6%	21.4%	0.87	Chart →
Nifty Energy NIFTYENERGY	+16.2%	20.6%	0.79	Chart →
NIFTY 50 NIFTY	+14.8%	14.2%	1.04	Chart →
Nifty Bank BANKNIFTY	+12.4%	18.6%	0.67	Chart →
Nifty IT NIFTYIT	+9.8%	22.1%	0.44	Chart →
Nifty FMCG NIFTYFMCG	+6.4%	12.8%	0.50	Chart →

Return / vol is a quick Sharpe-style proxy (ignores risk-free rate). Use for rough ranking only.

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Methodology: Pearson ρ on log daily returns across ~125 trading days of NSE sector-index closes, refreshed periodically. Cross-sector correlation spikes sharply during stress events (e.g. March 2020, September 2024) — a past-correlation estimate under-states drawdown clustering risk.

Research tool · not investment advice.

Axel Markets is an information + analytics product. We are not a SEBI-registered Research Analyst (RA) or Investment Adviser (IA). Nothing on this page is a buy, sell, or hold recommendation. Past performance is not indicative of future returns. Verify all data against the authoritative source (NSE, BSE, AMFI, SEBI, company RHP / factsheet) before acting. Correlation is a statistical input, not a trading signal. Pair-trade setups require additional stop-loss + sizing discipline.