Correlation Between AVALON TECHNOLOGIES and Lakshmi Finance
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By analyzing existing cross correlation between AVALON TECHNOLOGIES LTD and Lakshmi Finance Industrial, you can compare the effects of market volatilities on AVALON TECHNOLOGIES and Lakshmi 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 AVALON TECHNOLOGIES with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVALON TECHNOLOGIES and Lakshmi Finance.
Diversification Opportunities for AVALON TECHNOLOGIES and Lakshmi Finance
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVALON and Lakshmi is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AVALON TECHNOLOGIES LTD and Lakshmi Finance Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakshmi Finance Indu and AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES LTD are associated (or correlated) with Lakshmi Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakshmi Finance Indu has no effect on the direction of AVALON TECHNOLOGIES i.e., AVALON TECHNOLOGIES and Lakshmi Finance go up and down completely randomly.
Pair Corralation between AVALON TECHNOLOGIES and Lakshmi Finance
Assuming the 90 days trading horizon AVALON TECHNOLOGIES LTD is expected to generate 2.06 times more return on investment than Lakshmi Finance. However, AVALON TECHNOLOGIES is 2.06 times more volatile than Lakshmi Finance Industrial. It trades about 0.12 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about 0.03 per unit of risk. If you would invest 90,590 in AVALON TECHNOLOGIES LTD on September 27, 2024 and sell it today you would earn a total of 7,165 from holding AVALON TECHNOLOGIES LTD or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVALON TECHNOLOGIES LTD vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| AVALON TECHNOLOGIES LTD |
| Lakshmi Finance Indu |
AVALON TECHNOLOGIES and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVALON TECHNOLOGIES and Lakshmi Finance
The main advantage of trading using opposite AVALON TECHNOLOGIES and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVALON TECHNOLOGIES position performs unexpectedly, Lakshmi 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 Lakshmi Finance will offset losses from the drop in Lakshmi Finance's long position.| AVALON TECHNOLOGIES vs. Reliance Industries Limited | AVALON TECHNOLOGIES vs. State Bank of | AVALON TECHNOLOGIES vs. Oil Natural Gas | AVALON TECHNOLOGIES vs. ICICI Bank Limited |
| Lakshmi Finance vs. AVALON TECHNOLOGIES LTD | Lakshmi Finance vs. Selan Exploration Technology | Lakshmi Finance vs. Newgen Software Technologies | Lakshmi Finance vs. Cantabil Retail India |
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 Stocks Directory module to find actively traded stocks across global markets.
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