Correlation Between Selan Exploration and Lakshmi Finance
Can any of the company-specific risk be diversified away by investing in both Selan Exploration 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 Selan Exploration and Lakshmi Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selan Exploration Technology and Lakshmi Finance Industrial, you can compare the effects of market volatilities on Selan Exploration 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 Selan Exploration with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selan Exploration and Lakshmi Finance.
Diversification Opportunities for Selan Exploration and Lakshmi Finance
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Selan and Lakshmi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Selan Exploration Technology 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 Selan Exploration 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 Selan Exploration Technology 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 Selan Exploration i.e., Selan Exploration and Lakshmi Finance go up and down completely randomly.
Pair Corralation between Selan Exploration and Lakshmi Finance
Assuming the 90 days trading horizon Selan Exploration Technology is expected to under-perform the Lakshmi Finance. In addition to that, Selan Exploration is 1.29 times more volatile than Lakshmi Finance Industrial. It trades about -0.08 of its total potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about 0.03 per unit of volatility. If you would invest 22,880 in Lakshmi Finance Industrial on September 27, 2024 and sell it today you would earn a total of 170.00 from holding Lakshmi Finance Industrial or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selan Exploration Technology vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| Selan Exploration |
| Lakshmi Finance Indu |
Selan Exploration and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selan Exploration and Lakshmi Finance
The main advantage of trading using opposite Selan Exploration and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selan Exploration 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.| Selan Exploration vs. Hindustan Foods Limited | Selan Exploration vs. Hilton Metal Forging | Selan Exploration vs. Repco Home Finance | Selan Exploration vs. Ratnamani Metals Tubes |
| Lakshmi Finance vs. AVALON TECHNOLOGIES LTD | Lakshmi Finance vs. Selan Exploration Technology | Lakshmi Finance vs. Newgen Software Technologies | Lakshmi Finance vs. Cantabil Retail India |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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