Correlation Between Lux Industries and EIH Associated
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By analyzing existing cross correlation between Lux Industries Limited and EIH Associated Hotels, you can compare the effects of market volatilities on Lux Industries and EIH Associated 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 EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lux Industries and EIH Associated.
Diversification Opportunities for Lux Industries and EIH Associated
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lux and EIH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lux Industries Limited and EIH Associated Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIH Associated Hotels 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 EIH Associated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIH Associated Hotels has no effect on the direction of Lux Industries i.e., Lux Industries and EIH Associated go up and down completely randomly.
Pair Corralation between Lux Industries and EIH Associated
Assuming the 90 days trading horizon Lux Industries is expected to generate 5.49 times less return on investment than EIH Associated. But when comparing it to its historical volatility, Lux Industries Limited is 3.47 times less risky than EIH Associated. It trades about 0.03 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 19,641 in EIH Associated Hotels on September 14, 2024 and sell it today you would earn a total of 22,039 from holding EIH Associated Hotels or generate 112.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Lux Industries Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| Lux Industries |
| EIH Associated Hotels |
Lux Industries and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lux Industries and EIH Associated
The main advantage of trading using opposite Lux Industries and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lux Industries position performs unexpectedly, EIH Associated 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 EIH Associated will offset losses from the drop in EIH Associated's long position.| Lux Industries vs. KIOCL Limited | Lux Industries vs. Spentex Industries Limited | Lux Industries vs. Punjab Sind Bank | Lux Industries vs. ITI Limited |
| EIH Associated vs. Indian Railway Finance | EIH Associated vs. Cholamandalam Financial Holdings | EIH Associated vs. Reliance Industries Limited | EIH Associated vs. Tata Consultancy Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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