Correlation Between EIH Associated and Lux Industries
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By analyzing existing cross correlation between EIH Associated Hotels and Lux Industries Limited, you can compare the effects of market volatilities on EIH Associated 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 EIH Associated with a short position of Lux Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and Lux Industries.
Diversification Opportunities for EIH Associated and Lux Industries
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EIH and Lux is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and Lux Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lux Industries and EIH Associated 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 EIH Associated Hotels 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 EIH Associated i.e., EIH Associated and Lux Industries go up and down completely randomly.
Pair Corralation between EIH Associated and Lux Industries
Assuming the 90 days trading horizon EIH Associated Hotels is expected to generate 3.03 times more return on investment than Lux Industries. However, EIH Associated is 3.03 times more volatile than Lux Industries Limited. It trades about 0.06 of its potential returns per unit of risk. Lux Industries Limited is currently generating about 0.08 per unit of risk. If you would invest 22,511 in EIH Associated Hotels on September 14, 2024 and sell it today you would earn a total of 19,169 from holding EIH Associated Hotels or generate 85.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
EIH Associated Hotels vs. Lux Industries Limited
Performance |
| Timeline |
| EIH Associated Hotels |
| Lux Industries |
EIH Associated and Lux Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIH Associated and Lux Industries
The main advantage of trading using opposite EIH Associated and Lux Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated 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.| EIH Associated vs. Indian Railway Finance | EIH Associated vs. Cholamandalam Financial Holdings | EIH Associated vs. Reliance Industries Limited | EIH Associated vs. Tata Consultancy Services |
| Lux Industries vs. KIOCL Limited | Lux Industries vs. Spentex Industries Limited | Lux Industries vs. Punjab Sind Bank | Lux Industries vs. ITI 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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