Correlation Between Elin Electronics and LT Foods
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By analyzing existing cross correlation between Elin Electronics Limited and LT Foods Limited, you can compare the effects of market volatilities on Elin Electronics and LT Foods 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 Elin Electronics with a short position of LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elin Electronics and LT Foods.
Diversification Opportunities for Elin Electronics and LT Foods
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elin and LTFOODS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and LT Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Foods Limited and Elin Electronics 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 Elin Electronics Limited are associated (or correlated) with LT Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Foods Limited has no effect on the direction of Elin Electronics i.e., Elin Electronics and LT Foods go up and down completely randomly.
Pair Corralation between Elin Electronics and LT Foods
Assuming the 90 days trading horizon Elin Electronics Limited is expected to under-perform the LT Foods. But the stock apears to be less risky and, when comparing its historical volatility, Elin Electronics Limited is 1.07 times less risky than LT Foods. The stock trades about -0.08 of its potential returns per unit of risk. The LT Foods Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 40,326 in LT Foods Limited on September 3, 2024 and sell it today you would lose (616.00) from holding LT Foods Limited or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elin Electronics Limited vs. LT Foods Limited
Performance |
| Timeline |
| Elin Electronics |
| LT Foods Limited |
Elin Electronics and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elin Electronics and LT Foods
The main advantage of trading using opposite Elin Electronics and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elin Electronics position performs unexpectedly, LT Foods 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 LT Foods will offset losses from the drop in LT Foods' long position.| Elin Electronics vs. Metropolis Healthcare Limited | Elin Electronics vs. Zuari Agro Chemicals | Elin Electronics vs. Archean Chemical Industries | Elin Electronics vs. Country Club Hospitality |
| LT Foods vs. Tata Consultancy Services | LT Foods vs. Quess Corp Limited | LT Foods vs. Reliance Industries Limited | LT Foods vs. Infosys 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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