Correlation Between Indian Metals and Lotus Eye
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By analyzing existing cross correlation between Indian Metals Ferro and Lotus Eye Hospital, you can compare the effects of market volatilities on Indian Metals and Lotus Eye 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 Indian Metals with a short position of Lotus Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and Lotus Eye.
Diversification Opportunities for Indian Metals and Lotus Eye
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indian and Lotus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Indian Metals Ferro and Lotus Eye Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Eye Hospital and Indian Metals 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 Indian Metals Ferro are associated (or correlated) with Lotus Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Eye Hospital has no effect on the direction of Indian Metals i.e., Indian Metals and Lotus Eye go up and down completely randomly.
Pair Corralation between Indian Metals and Lotus Eye
Assuming the 90 days trading horizon Indian Metals Ferro is expected to generate 0.9 times more return on investment than Lotus Eye. However, Indian Metals Ferro is 1.11 times less risky than Lotus Eye. It trades about 0.11 of its potential returns per unit of risk. Lotus Eye Hospital is currently generating about 0.01 per unit of risk. If you would invest 23,080 in Indian Metals Ferro on September 3, 2024 and sell it today you would earn a total of 61,135 from holding Indian Metals Ferro or generate 264.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Indian Metals Ferro vs. Lotus Eye Hospital
Performance |
| Timeline |
| Indian Metals Ferro |
| Lotus Eye Hospital |
Indian Metals and Lotus Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Metals and Lotus Eye
The main advantage of trading using opposite Indian Metals and Lotus Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Metals position performs unexpectedly, Lotus Eye 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 Lotus Eye will offset losses from the drop in Lotus Eye's long position.The idea behind Indian Metals Ferro and Lotus Eye Hospital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lotus Eye vs. LLOYDS METALS AND | Lotus Eye vs. Tata Communications Limited | Lotus Eye vs. Indian Metals Ferro | Lotus Eye vs. Alkali Metals 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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