Correlation Between Max Financial and Lakshmi Finance
Can any of the company-specific risk be diversified away by investing in both Max Financial and Lakshmi Finance 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 Max Financial and Lakshmi Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Max Financial Services and Lakshmi Finance Industrial, you can compare the effects of market volatilities on Max Financial and Lakshmi Finance 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 Max Financial with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and Lakshmi Finance.
Diversification Opportunities for Max Financial and Lakshmi Finance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Max and Lakshmi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and Lakshmi Finance Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakshmi Finance Indu and Max Financial 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 Max Financial Services are associated (or correlated) with Lakshmi Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakshmi Finance Indu has no effect on the direction of Max Financial i.e., Max Financial and Lakshmi Finance go up and down completely randomly.
Pair Corralation between Max Financial and Lakshmi Finance
Assuming the 90 days trading horizon Max Financial Services is expected to generate 0.84 times more return on investment than Lakshmi Finance. However, Max Financial Services is 1.19 times less risky than Lakshmi Finance. It trades about -0.03 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about -0.33 per unit of risk. If you would invest 116,990 in Max Financial Services on September 3, 2024 and sell it today you would lose (3,595) from holding Max Financial Services or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Max Financial Services vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| Max Financial Services |
| Lakshmi Finance Indu |
Max Financial and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Financial and Lakshmi Finance
The main advantage of trading using opposite Max Financial and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial position performs unexpectedly, Lakshmi Finance 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 Lakshmi Finance will offset losses from the drop in Lakshmi Finance's long position.| Max Financial vs. Reliance Industries Limited | Max Financial vs. Shipping | Max Financial vs. Indo Borax Chemicals | Max Financial vs. Kingfa Science Technology |
| Lakshmi Finance vs. The Federal Bank | Lakshmi Finance vs. General Insurance | Lakshmi Finance vs. Max Financial Services | Lakshmi Finance vs. Ankit Metal Power |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |