Correlation Between Lakshmi Precision and SAL Steel
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By analyzing existing cross correlation between Lakshmi Precision Screws and SAL Steel Limited, you can compare the effects of market volatilities on Lakshmi Precision and SAL Steel 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 Lakshmi Precision with a short position of SAL Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakshmi Precision and SAL Steel.
Diversification Opportunities for Lakshmi Precision and SAL Steel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lakshmi and SAL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lakshmi Precision Screws and SAL Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAL Steel Limited and Lakshmi Precision 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 Lakshmi Precision Screws are associated (or correlated) with SAL Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAL Steel Limited has no effect on the direction of Lakshmi Precision i.e., Lakshmi Precision and SAL Steel go up and down completely randomly.
Pair Corralation between Lakshmi Precision and SAL Steel
Assuming the 90 days trading horizon Lakshmi Precision is expected to generate 1.23 times less return on investment than SAL Steel. But when comparing it to its historical volatility, Lakshmi Precision Screws is 1.13 times less risky than SAL Steel. It trades about 0.07 of its potential returns per unit of risk. SAL Steel Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,890 in SAL Steel Limited on September 2, 2024 and sell it today you would earn a total of 538.00 from holding SAL Steel Limited or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakshmi Precision Screws vs. SAL Steel Limited
Performance |
| Timeline |
| Lakshmi Precision Screws |
| SAL Steel Limited |
Lakshmi Precision and SAL Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakshmi Precision and SAL Steel
The main advantage of trading using opposite Lakshmi Precision and SAL Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakshmi Precision position performs unexpectedly, SAL Steel 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 SAL Steel will offset losses from the drop in SAL Steel's long position.| Lakshmi Precision vs. State Bank of | Lakshmi Precision vs. Life Insurance | Lakshmi Precision vs. HDFC Bank Limited | Lakshmi Precision vs. ICICI Bank Limited |
| SAL Steel vs. One 97 Communications | SAL Steel vs. Tata Communications Limited | SAL Steel vs. Ratnamani Metals Tubes | SAL Steel vs. Indian Metals Ferro |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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