Correlation Between Dow Jones and Lumax Auto
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By analyzing existing cross correlation between Dow Jones Industrial and Lumax Auto Technologies, you can compare the effects of market volatilities on Dow Jones and Lumax Auto 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 Dow Jones with a short position of Lumax Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Lumax Auto.
Diversification Opportunities for Dow Jones and Lumax Auto
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Lumax is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Lumax Auto Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumax Auto Technologies and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Lumax Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumax Auto Technologies has no effect on the direction of Dow Jones i.e., Dow Jones and Lumax Auto go up and down completely randomly.
Pair Corralation between Dow Jones and Lumax Auto
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Lumax Auto. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 4.49 times less risky than Lumax Auto. The index trades about -0.21 of its potential returns per unit of risk. The Lumax Auto Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 50,525 in Lumax Auto Technologies on November 28, 2024 and sell it today you would earn a total of 3,865 from holding Lumax Auto Technologies or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Lumax Auto Technologies
Performance |
| Timeline |
Dow Jones and Lumax Auto Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Lumax Auto Technologies
Pair trading matchups for Lumax Auto
Pair Trading with Dow Jones and Lumax Auto
The main advantage of trading using opposite Dow Jones and Lumax Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Lumax Auto 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 Lumax Auto will offset losses from the drop in Lumax Auto's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| Lumax Auto vs. Juniper Hotels | Lumax Auto vs. Royal Orchid Hotels | Lumax Auto vs. Samhi Hotels Limited | Lumax Auto vs. Lemon Tree Hotels |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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