Correlation Between LT Technology and Agro Tech
Can any of the company-specific risk be diversified away by investing in both LT Technology and Agro Tech 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 LT Technology and Agro Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LT Technology Services and Agro Tech Foods, you can compare the effects of market volatilities on LT Technology and Agro Tech 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 LT Technology with a short position of Agro Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LT Technology and Agro Tech.
Diversification Opportunities for LT Technology and Agro Tech
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LTTS and Agro is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding LT Technology Services and Agro Tech Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Tech Foods and LT Technology 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 LT Technology Services are associated (or correlated) with Agro Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Tech Foods has no effect on the direction of LT Technology i.e., LT Technology and Agro Tech go up and down completely randomly.
Pair Corralation between LT Technology and Agro Tech
Assuming the 90 days trading horizon LT Technology Services is expected to generate 0.63 times more return on investment than Agro Tech. However, LT Technology Services is 1.58 times less risky than Agro Tech. It trades about 0.05 of its potential returns per unit of risk. Agro Tech Foods is currently generating about -0.03 per unit of risk. If you would invest 515,630 in LT Technology Services on August 31, 2024 and sell it today you would earn a total of 9,335 from holding LT Technology Services or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
LT Technology Services vs. Agro Tech Foods
Performance |
| Timeline |
| LT Technology Services |
| Agro Tech Foods |
LT Technology and Agro Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LT Technology and Agro Tech
The main advantage of trading using opposite LT Technology and Agro Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LT Technology position performs unexpectedly, Agro Tech 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 Agro Tech will offset losses from the drop in Agro Tech's long position.| LT Technology vs. Tata Consultancy Services | LT Technology vs. Reliance Industries Limited | LT Technology vs. SIS LIMITED | LT Technology vs. State Bank of |
| Agro Tech vs. MRF Limited | Agro Tech vs. Bosch Limited | Agro Tech vs. Bajaj Holdings Investment | Agro Tech vs. Vardhman Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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