Correlation Between Sportking India and LT Foods
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By analyzing existing cross correlation between Sportking India Limited and LT Foods Limited, you can compare the effects of market volatilities on Sportking India 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 Sportking India with a short position of LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportking India and LT Foods.
Diversification Opportunities for Sportking India and LT Foods
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sportking and LTFOODS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sportking India 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 Sportking India 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 Sportking India 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 Sportking India i.e., Sportking India and LT Foods go up and down completely randomly.
Pair Corralation between Sportking India and LT Foods
Assuming the 90 days trading horizon Sportking India Limited is expected to generate 1.25 times more return on investment than LT Foods. However, Sportking India is 1.25 times more volatile than LT Foods Limited. It trades about -0.17 of its potential returns per unit of risk. LT Foods Limited is currently generating about -0.23 per unit of risk. If you would invest 10,522 in Sportking India Limited on November 2, 2024 and sell it today you would lose (1,496) from holding Sportking India Limited or give up 14.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportking India Limited vs. LT Foods Limited
Performance |
| Timeline |
| Sportking India |
| LT Foods Limited |
Sportking India and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportking India and LT Foods
The main advantage of trading using opposite Sportking India and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportking India 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.| Sportking India vs. DIAMINES AND CHEMICALS | Sportking India vs. JGCHEMICALS LIMITED | Sportking India vs. Chembond Chemicals | Sportking India vs. Tainwala Chemical and |
| LT Foods vs. Transport of | LT Foods vs. Rainbow Childrens Medicare | LT Foods vs. Dharani SugarsChemicals Limited | LT Foods vs. Indo Borax Chemicals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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