Correlation Between ILFS Investment and Lakshmi Finance
Can any of the company-specific risk be diversified away by investing in both ILFS Investment and Lakshmi Finance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ILFS Investment and Lakshmi Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ILFS Investment Managers and Lakshmi Finance Industrial, you can compare the effects of market volatilities on ILFS Investment 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 ILFS Investment with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and Lakshmi Finance.
Diversification Opportunities for ILFS Investment and Lakshmi Finance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ILFS and Lakshmi is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers 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 ILFS Investment 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 ILFS Investment Managers 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 ILFS Investment i.e., ILFS Investment and Lakshmi Finance go up and down completely randomly.
Pair Corralation between ILFS Investment and Lakshmi Finance
Assuming the 90 days trading horizon ILFS Investment Managers is expected to generate 1.11 times more return on investment than Lakshmi Finance. However, ILFS Investment is 1.11 times more volatile than Lakshmi Finance Industrial. It trades about -0.05 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about -0.18 per unit of risk. If you would invest 1,106 in ILFS Investment Managers on October 28, 2024 and sell it today you would lose (46.00) from holding ILFS Investment Managers or give up 4.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ILFS Investment Managers vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| ILFS Investment Managers |
| Lakshmi Finance Indu |
ILFS Investment and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ILFS Investment and Lakshmi Finance
The main advantage of trading using opposite ILFS Investment and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ILFS Investment 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.| ILFS Investment vs. Nalwa Sons Investments | ILFS Investment vs. Kalyani Investment | ILFS Investment vs. Pilani Investment and | ILFS Investment vs. Kingfa Science Technology |
| Lakshmi Finance vs. Silly Monks Entertainment | Lakshmi Finance vs. Elin Electronics Limited | Lakshmi Finance vs. Infomedia Press Limited | Lakshmi Finance vs. Baazar Style Retail |
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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