Correlation Between Lakshmi Finance and DJ Mediaprint
Can any of the company-specific risk be diversified away by investing in both Lakshmi Finance and DJ Mediaprint 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 Lakshmi Finance and DJ Mediaprint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakshmi Finance Industrial and DJ Mediaprint Logistics, you can compare the effects of market volatilities on Lakshmi Finance and DJ Mediaprint 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 Finance with a short position of DJ Mediaprint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakshmi Finance and DJ Mediaprint.
Diversification Opportunities for Lakshmi Finance and DJ Mediaprint
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lakshmi and DJML is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lakshmi Finance Industrial and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and Lakshmi Finance 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 Finance Industrial are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of Lakshmi Finance i.e., Lakshmi Finance and DJ Mediaprint go up and down completely randomly.
Pair Corralation between Lakshmi Finance and DJ Mediaprint
Assuming the 90 days trading horizon Lakshmi Finance Industrial is expected to under-perform the DJ Mediaprint. But the stock apears to be less risky and, when comparing its historical volatility, Lakshmi Finance Industrial is 2.53 times less risky than DJ Mediaprint. The stock trades about -0.02 of its potential returns per unit of risk. The DJ Mediaprint Logistics is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 12,859 in DJ Mediaprint Logistics on September 25, 2024 and sell it today you would earn a total of 5,004 from holding DJ Mediaprint Logistics or generate 38.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakshmi Finance Industrial vs. DJ Mediaprint Logistics
Performance |
| Timeline |
| Lakshmi Finance Indu |
| DJ Mediaprint Logistics |
Lakshmi Finance and DJ Mediaprint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakshmi Finance and DJ Mediaprint
The main advantage of trading using opposite Lakshmi Finance and DJ Mediaprint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakshmi Finance position performs unexpectedly, DJ Mediaprint 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 DJ Mediaprint will offset losses from the drop in DJ Mediaprint's long position.| Lakshmi Finance vs. Kaushalya Infrastructure Development | Lakshmi Finance vs. Tarapur Transformers Limited | Lakshmi Finance vs. Kingfa Science Technology | Lakshmi Finance vs. Rico Auto Industries |
| DJ Mediaprint vs. Kingfa Science Technology | DJ Mediaprint vs. Rico Auto Industries | DJ Mediaprint vs. GACM Technologies Limited | DJ Mediaprint vs. COSMO FIRST 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 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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