Correlation Between LT Technology and Karnataka Bank
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By analyzing existing cross correlation between LT Technology Services and The Karnataka Bank, you can compare the effects of market volatilities on LT Technology and Karnataka Bank 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 Karnataka Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of LT Technology and Karnataka Bank.
Diversification Opportunities for LT Technology and Karnataka Bank
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LTTS and Karnataka is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding LT Technology Services and The Karnataka Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karnataka Bank 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 Karnataka Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karnataka Bank has no effect on the direction of LT Technology i.e., LT Technology and Karnataka Bank go up and down completely randomly.
Pair Corralation between LT Technology and Karnataka Bank
Assuming the 90 days trading horizon LT Technology is expected to generate 1.56 times less return on investment than Karnataka Bank. But when comparing it to its historical volatility, LT Technology Services is 1.45 times less risky than Karnataka Bank. It trades about 0.05 of its potential returns per unit of risk. The Karnataka Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,597 in The Karnataka Bank on September 12, 2024 and sell it today you would earn a total of 8,319 from holding The Karnataka Bank or generate 61.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LT Technology Services vs. The Karnataka Bank
Performance |
| Timeline |
| LT Technology Services |
| Karnataka Bank |
LT Technology and Karnataka Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LT Technology and Karnataka Bank
The main advantage of trading using opposite LT Technology and Karnataka Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LT Technology position performs unexpectedly, Karnataka Bank 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 Karnataka Bank will offset losses from the drop in Karnataka Bank's long position.| LT Technology vs. Reliance Industries Limited | LT Technology vs. Oil Natural Gas | LT Technology vs. Indian Oil | LT Technology vs. HDFC Bank Limited |
| Karnataka Bank vs. Amrutanjan Health Care | Karnataka Bank vs. Yatharth Hospital Trauma | Karnataka Bank vs. Univa Foods Limited | Karnataka Bank vs. Metropolis Healthcare 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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