Correlation Between Likhitha Infrastructure and Fineotex Chemical
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By analyzing existing cross correlation between Likhitha Infrastructure Limited and Fineotex Chemical Limited, you can compare the effects of market volatilities on Likhitha Infrastructure and Fineotex Chemical 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 Likhitha Infrastructure with a short position of Fineotex Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Likhitha Infrastructure and Fineotex Chemical.
Diversification Opportunities for Likhitha Infrastructure and Fineotex Chemical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Likhitha and Fineotex is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Likhitha Infrastructure Limite and Fineotex Chemical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fineotex Chemical and Likhitha Infrastructure 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 Likhitha Infrastructure Limited are associated (or correlated) with Fineotex Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fineotex Chemical has no effect on the direction of Likhitha Infrastructure i.e., Likhitha Infrastructure and Fineotex Chemical go up and down completely randomly.
Pair Corralation between Likhitha Infrastructure and Fineotex Chemical
Assuming the 90 days trading horizon Likhitha Infrastructure Limited is expected to under-perform the Fineotex Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Likhitha Infrastructure Limited is 1.19 times less risky than Fineotex Chemical. The stock trades about -0.19 of its potential returns per unit of risk. The Fineotex Chemical Limited is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 34,180 in Fineotex Chemical Limited on November 4, 2024 and sell it today you would lose (1,700) from holding Fineotex Chemical Limited or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Likhitha Infrastructure Limite vs. Fineotex Chemical Limited
Performance |
| Timeline |
| Likhitha Infrastructure |
| Fineotex Chemical |
Likhitha Infrastructure and Fineotex Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Likhitha Infrastructure and Fineotex Chemical
The main advantage of trading using opposite Likhitha Infrastructure and Fineotex Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Likhitha Infrastructure position performs unexpectedly, Fineotex Chemical 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 Fineotex Chemical will offset losses from the drop in Fineotex Chemical's long position.| Likhitha Infrastructure vs. Sarthak Metals Limited | Likhitha Infrastructure vs. Shyam Metalics and | Likhitha Infrastructure vs. Hindustan Copper Limited | Likhitha Infrastructure vs. Hilton Metal Forging |
| Fineotex Chemical vs. Rajnandini Metal Limited | Fineotex Chemical vs. Ratnamani Metals Tubes | Fineotex Chemical vs. Total Transport Systems | Fineotex Chemical vs. Computer Age Management |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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