Correlation Between Lumia and Gillette India
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By analyzing existing cross correlation between Lumia and Gillette India Limited, you can compare the effects of market volatilities on Lumia and Gillette India 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 Lumia with a short position of Gillette India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Gillette India.
Diversification Opportunities for Lumia and Gillette India
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lumia and Gillette is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Gillette India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gillette India and Lumia 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 Lumia are associated (or correlated) with Gillette India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gillette India has no effect on the direction of Lumia i.e., Lumia and Gillette India go up and down completely randomly.
Pair Corralation between Lumia and Gillette India
Assuming the 90 days trading horizon Lumia is expected to under-perform the Gillette India. In addition to that, Lumia is 2.62 times more volatile than Gillette India Limited. It trades about -0.38 of its total potential returns per unit of risk. Gillette India Limited is currently generating about -0.06 per unit of volatility. If you would invest 980,260 in Gillette India Limited on October 16, 2024 and sell it today you would lose (31,070) from holding Gillette India Limited or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lumia vs. Gillette India Limited
Performance |
| Timeline |
| Lumia |
| Gillette India |
Lumia and Gillette India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Gillette India
The main advantage of trading using opposite Lumia and Gillette India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Gillette India 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 Gillette India will offset losses from the drop in Gillette India's long position.The idea behind Lumia and Gillette India Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gillette India vs. JGCHEMICALS LIMITED | Gillette India vs. Bikaji Foods International | Gillette India vs. Teamlease Services Limited | Gillette India vs. Transport of |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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