Correlation Between Lumia and Sandhar Technologies
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By analyzing existing cross correlation between Lumia and Sandhar Technologies Limited, you can compare the effects of market volatilities on Lumia and Sandhar Technologies 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 Sandhar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Sandhar Technologies.
Diversification Opportunities for Lumia and Sandhar Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lumia and Sandhar is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Sandhar Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandhar Technologies 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 Sandhar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandhar Technologies has no effect on the direction of Lumia i.e., Lumia and Sandhar Technologies go up and down completely randomly.
Pair Corralation between Lumia and Sandhar Technologies
Assuming the 90 days trading horizon Lumia is expected to under-perform the Sandhar Technologies. In addition to that, Lumia is 3.63 times more volatile than Sandhar Technologies Limited. It trades about -0.34 of its total potential returns per unit of risk. Sandhar Technologies Limited is currently generating about -0.43 per unit of volatility. If you would invest 54,980 in Sandhar Technologies Limited on October 15, 2024 and sell it today you would lose (7,695) from holding Sandhar Technologies Limited or give up 14.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lumia vs. Sandhar Technologies Limited
Performance |
| Timeline |
| Lumia |
| Sandhar Technologies |
Lumia and Sandhar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Sandhar Technologies
The main advantage of trading using opposite Lumia and Sandhar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Sandhar Technologies 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 Sandhar Technologies will offset losses from the drop in Sandhar Technologies' long position.The idea behind Lumia and Sandhar Technologies 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.| Sandhar Technologies vs. TECIL Chemicals and | Sandhar Technologies vs. Krebs Biochemicals and | Sandhar Technologies vs. Agro Tech Foods | Sandhar Technologies vs. Patanjali Foods 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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