Correlation Between Allied Blenders and Lux Industries
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By analyzing existing cross correlation between Allied Blenders Distillers and Lux Industries Limited, you can compare the effects of market volatilities on Allied Blenders and Lux Industries 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 Allied Blenders with a short position of Lux Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Blenders and Lux Industries.
Diversification Opportunities for Allied Blenders and Lux Industries
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allied and Lux is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Allied Blenders Distillers and Lux Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lux Industries and Allied Blenders 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 Allied Blenders Distillers are associated (or correlated) with Lux Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lux Industries has no effect on the direction of Allied Blenders i.e., Allied Blenders and Lux Industries go up and down completely randomly.
Pair Corralation between Allied Blenders and Lux Industries
Assuming the 90 days trading horizon Allied Blenders Distillers is expected to generate 0.86 times more return on investment than Lux Industries. However, Allied Blenders Distillers is 1.17 times less risky than Lux Industries. It trades about 0.45 of its potential returns per unit of risk. Lux Industries Limited is currently generating about 0.27 per unit of risk. If you would invest 31,635 in Allied Blenders Distillers on September 13, 2024 and sell it today you would earn a total of 5,755 from holding Allied Blenders Distillers or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Allied Blenders Distillers vs. Lux Industries Limited
Performance |
| Timeline |
| Allied Blenders Dist |
| Lux Industries |
Allied Blenders and Lux Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Blenders and Lux Industries
The main advantage of trading using opposite Allied Blenders and Lux Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Blenders position performs unexpectedly, Lux Industries 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 Lux Industries will offset losses from the drop in Lux Industries' long position.| Allied Blenders vs. Kingfa Science Technology | Allied Blenders vs. Rico Auto Industries | Allied Blenders vs. GACM Technologies Limited | Allied Blenders vs. COSMO FIRST LIMITED |
| Lux Industries vs. EIH Associated Hotels | Lux Industries vs. The Hi Tech Gears | Lux Industries vs. Samhi Hotels Limited | Lux Industries vs. Asian Hotels Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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