Correlation Between Federal Bank and Lakshmi Finance
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By analyzing existing cross correlation between The Federal Bank and Lakshmi Finance Industrial, you can compare the effects of market volatilities on Federal Bank 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 Federal Bank with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and Lakshmi Finance.
Diversification Opportunities for Federal Bank and Lakshmi Finance
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Lakshmi is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank 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 Federal Bank 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 The Federal Bank 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 Federal Bank i.e., Federal Bank and Lakshmi Finance go up and down completely randomly.
Pair Corralation between Federal Bank and Lakshmi Finance
Assuming the 90 days trading horizon Federal Bank is expected to generate 1.35 times less return on investment than Lakshmi Finance. But when comparing it to its historical volatility, The Federal Bank is 2.29 times less risky than Lakshmi Finance. It trades about 0.11 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17,585 in Lakshmi Finance Industrial on September 3, 2024 and sell it today you would earn a total of 5,370 from holding Lakshmi Finance Industrial or generate 30.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Federal Bank vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| Federal Bank |
| Lakshmi Finance Indu |
Federal Bank and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Bank and Lakshmi Finance
The main advantage of trading using opposite Federal Bank and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Bank 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.| Federal Bank vs. Reliance Industries Limited | Federal Bank vs. Shipping | Federal Bank vs. Indo Borax Chemicals | Federal Bank vs. Kingfa Science Technology |
| Lakshmi Finance vs. The Federal Bank | Lakshmi Finance vs. General Insurance | Lakshmi Finance vs. Max Financial Services | Lakshmi Finance vs. Ankit Metal Power |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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