Correlation Between Home First and LT Foods
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By analyzing existing cross correlation between Home First Finance and LT Foods Limited, you can compare the effects of market volatilities on Home First 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 Home First with a short position of LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home First and LT Foods.
Diversification Opportunities for Home First and LT Foods
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and LTFOODS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Home First Finance 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 Home First 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 Home First Finance 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 Home First i.e., Home First and LT Foods go up and down completely randomly.
Pair Corralation between Home First and LT Foods
Assuming the 90 days trading horizon Home First Finance is expected to generate 0.96 times more return on investment than LT Foods. However, Home First Finance is 1.04 times less risky than LT Foods. It trades about 0.01 of its potential returns per unit of risk. LT Foods Limited is currently generating about -0.02 per unit of risk. If you would invest 109,275 in Home First Finance on August 25, 2024 and sell it today you would lose (605.00) from holding Home First Finance or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Home First Finance vs. LT Foods Limited
Performance |
| Timeline |
| Home First Finance |
| LT Foods Limited |
Home First and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home First and LT Foods
The main advantage of trading using opposite Home First and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home First 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.| Home First vs. MRF Limited | Home First vs. JSW Holdings Limited | Home First vs. Nalwa Sons Investments | Home First vs. Kalyani Investment |
| LT Foods vs. R S Software | LT Foods vs. Dev Information Technology | LT Foods vs. Syrma SGS Technology | LT Foods vs. Network18 Media Investments |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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