Correlation Between Lux Industries and Dow Jones
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By analyzing existing cross correlation between Lux Industries Limited and Dow Jones Industrial, you can compare the effects of market volatilities on Lux Industries and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lux Industries and Dow Jones.
Diversification Opportunities for Lux Industries and Dow Jones
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lux and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lux Industries Limited and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Lux Industries i.e., Lux Industries and Dow Jones go up and down completely randomly.
Pair Corralation between Lux Industries and Dow Jones
Assuming the 90 days trading horizon Lux Industries Limited is expected to generate 3.75 times more return on investment than Dow Jones. However, Lux Industries is 3.75 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 137,589 in Lux Industries Limited on September 4, 2024 and sell it today you would earn a total of 57,671 from holding Lux Industries Limited or generate 41.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.97% |
| Values | Daily Returns |
Lux Industries Limited vs. Dow Jones Industrial
Performance |
| Timeline |
Lux Industries and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Lux Industries Limited
Pair trading matchups for Lux Industries
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lux Industries and Dow Jones
The main advantage of trading using opposite Lux Industries and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lux Industries position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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