Correlation Between MIC Electronics and LT Foods
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By analyzing existing cross correlation between MIC Electronics Limited and LT Foods Limited, you can compare the effects of market volatilities on MIC Electronics and LT Foods 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 MIC Electronics with a short position of LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIC Electronics and LT Foods.
Diversification Opportunities for MIC Electronics and LT Foods
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MIC and LTFOODS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MIC Electronics Limited and LT Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Foods Limited and MIC Electronics 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 MIC Electronics Limited are associated (or correlated) with LT Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Foods Limited has no effect on the direction of MIC Electronics i.e., MIC Electronics and LT Foods go up and down completely randomly.
Pair Corralation between MIC Electronics and LT Foods
Assuming the 90 days trading horizon MIC Electronics Limited is expected to generate 1.15 times more return on investment than LT Foods. However, MIC Electronics is 1.15 times more volatile than LT Foods Limited. It trades about 0.14 of its potential returns per unit of risk. LT Foods Limited is currently generating about 0.11 per unit of risk. If you would invest 1,195 in MIC Electronics Limited on August 27, 2024 and sell it today you would earn a total of 7,139 from holding MIC Electronics Limited or generate 597.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.1% |
| Values | Daily Returns |
MIC Electronics Limited vs. LT Foods Limited
Performance |
| Timeline |
| MIC Electronics |
| LT Foods Limited |
MIC Electronics and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIC Electronics and LT Foods
The main advantage of trading using opposite MIC Electronics and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIC Electronics position performs unexpectedly, LT Foods 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 LT Foods will offset losses from the drop in LT Foods' long position.| MIC Electronics vs. Life Insurance | MIC Electronics vs. Power Finance | MIC Electronics vs. HDFC Bank Limited | MIC Electronics vs. State Bank of |
| LT Foods vs. Reliance Industries Limited | LT Foods vs. State Bank of | LT Foods vs. HDFC Bank Limited | LT Foods vs. Oil Natural Gas |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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