Correlation Between LT Technology and NIIT
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By analyzing existing cross correlation between LT Technology Services and NIIT Limited, you can compare the effects of market volatilities on LT Technology and NIIT 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 NIIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LT Technology and NIIT.
Diversification Opportunities for LT Technology and NIIT
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LTTS and NIIT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LT Technology Services and NIIT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT Limited 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 NIIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT Limited has no effect on the direction of LT Technology i.e., LT Technology and NIIT go up and down completely randomly.
Pair Corralation between LT Technology and NIIT
Assuming the 90 days trading horizon LT Technology is expected to generate 1.17 times less return on investment than NIIT. But when comparing it to its historical volatility, LT Technology Services is 2.94 times less risky than NIIT. It trades about 0.05 of its potential returns per unit of risk. NIIT Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30,964 in NIIT Limited on September 20, 2024 and sell it today you would lose (10,854) from holding NIIT Limited or give up 35.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LT Technology Services vs. NIIT Limited
Performance |
Timeline |
LT Technology Services |
NIIT Limited |
LT Technology and NIIT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LT Technology and NIIT
The main advantage of trading using opposite LT Technology and NIIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LT Technology position performs unexpectedly, NIIT 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 NIIT will offset losses from the drop in NIIT's long position.LT Technology vs. Vodafone Idea Limited | LT Technology vs. Yes Bank Limited | LT Technology vs. Indian Overseas Bank | LT Technology vs. Indian Oil |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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