Correlation Between Lux Industries and DiGiSPICE Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lux Industries and DiGiSPICE Technologies 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 Lux Industries and DiGiSPICE Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lux Industries Limited and DiGiSPICE Technologies Limited, you can compare the effects of market volatilities on Lux Industries and DiGiSPICE 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 Lux Industries with a short position of DiGiSPICE Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lux Industries and DiGiSPICE Technologies.

Diversification Opportunities for Lux Industries and DiGiSPICE Technologies

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Lux and DiGiSPICE is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lux Industries Limited and DiGiSPICE Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiGiSPICE Technologies and Lux Industries 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 Lux Industries Limited are associated (or correlated) with DiGiSPICE Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiGiSPICE Technologies has no effect on the direction of Lux Industries i.e., Lux Industries and DiGiSPICE Technologies go up and down completely randomly.

Pair Corralation between Lux Industries and DiGiSPICE Technologies

Assuming the 90 days trading horizon Lux Industries Limited is expected to generate 0.72 times more return on investment than DiGiSPICE Technologies. However, Lux Industries Limited is 1.39 times less risky than DiGiSPICE Technologies. It trades about 0.07 of its potential returns per unit of risk. DiGiSPICE Technologies Limited is currently generating about 0.01 per unit of risk. If you would invest  137,040  in Lux Industries Limited on September 3, 2024 and sell it today you would earn a total of  58,220  from holding Lux Industries Limited or generate 42.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.18%
ValuesDaily Returns

Lux Industries Limited  vs.  DiGiSPICE Technologies Limited

 Performance 
       Timeline  
Lux Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lux Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
DiGiSPICE Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DiGiSPICE Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lux Industries and DiGiSPICE Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lux Industries and DiGiSPICE Technologies

The main advantage of trading using opposite Lux Industries and DiGiSPICE Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lux Industries position performs unexpectedly, DiGiSPICE 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 DiGiSPICE Technologies will offset losses from the drop in DiGiSPICE Technologies' long position.
Lux Industries vs. Elgi Rubber
Lux Industries vs. Avonmore Capital Management
Lux Industries vs. LLOYDS METALS AND
Lux Industries vs. Coffee Day Enterprises
The idea behind Lux Industries Limited and DiGiSPICE 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.
DiGiSPICE Technologies vs. Consolidated Construction Consortium
DiGiSPICE Technologies vs. Biofil Chemicals Pharmaceuticals
DiGiSPICE Technologies vs. Shipping
DiGiSPICE Technologies vs. Indo Borax Chemicals
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY