Correlation Between Radico Khaitan and Lakshmi Finance
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By analyzing existing cross correlation between Radico Khaitan Limited and Lakshmi Finance Industrial, you can compare the effects of market volatilities on Radico Khaitan 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 Radico Khaitan with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radico Khaitan and Lakshmi Finance.
Diversification Opportunities for Radico Khaitan and Lakshmi Finance
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Radico and Lakshmi is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Radico Khaitan Limited 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 Radico Khaitan 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 Radico Khaitan Limited 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 Radico Khaitan i.e., Radico Khaitan and Lakshmi Finance go up and down completely randomly.
Pair Corralation between Radico Khaitan and Lakshmi Finance
Assuming the 90 days trading horizon Radico Khaitan Limited is expected to generate 0.55 times more return on investment than Lakshmi Finance. However, Radico Khaitan Limited is 1.83 times less risky than Lakshmi Finance. It trades about 0.12 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about 0.06 per unit of risk. If you would invest 166,674 in Radico Khaitan Limited on September 3, 2024 and sell it today you would earn a total of 79,111 from holding Radico Khaitan Limited or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Radico Khaitan Limited vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| Radico Khaitan |
| Lakshmi Finance Indu |
Radico Khaitan and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radico Khaitan and Lakshmi Finance
The main advantage of trading using opposite Radico Khaitan and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radico Khaitan 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.| Radico Khaitan vs. Sarveshwar Foods Limited | Radico Khaitan vs. Meghmani Organics Limited | Radico Khaitan vs. Apex Frozen Foods | Radico Khaitan vs. Jayant Agro Organics |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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