Correlation Between Lux Industries and Newgen Software
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By analyzing existing cross correlation between Lux Industries Limited and Newgen Software Technologies, you can compare the effects of market volatilities on Lux Industries and Newgen Software 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 Newgen Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lux Industries and Newgen Software.
Diversification Opportunities for Lux Industries and Newgen Software
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lux and Newgen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lux Industries Limited and Newgen Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newgen Software Tech 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 Newgen Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newgen Software Tech has no effect on the direction of Lux Industries i.e., Lux Industries and Newgen Software go up and down completely randomly.
Pair Corralation between Lux Industries and Newgen Software
Assuming the 90 days trading horizon Lux Industries Limited is expected to generate 0.66 times more return on investment than Newgen Software. However, Lux Industries Limited is 1.52 times less risky than Newgen Software. It trades about -0.17 of its potential returns per unit of risk. Newgen Software Technologies is currently generating about -0.15 per unit of risk. If you would invest 192,735 in Lux Industries Limited on October 24, 2024 and sell it today you would lose (23,585) from holding Lux Industries Limited or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lux Industries Limited vs. Newgen Software Technologies
Performance |
| Timeline |
| Lux Industries |
| Newgen Software Tech |
Lux Industries and Newgen Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lux Industries and Newgen Software
The main advantage of trading using opposite Lux Industries and Newgen Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lux Industries position performs unexpectedly, Newgen Software 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 Newgen Software will offset losses from the drop in Newgen Software's long position.| Lux Industries vs. Reliance Home Finance | Lux Industries vs. HDFC Asset Management | Lux Industries vs. Computer Age Management | Lux Industries vs. Radiant Cash Management |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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