Correlation Between Syrma SGS and Lakshmi Finance
Can any of the company-specific risk be diversified away by investing in both Syrma SGS 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 Syrma SGS and Lakshmi Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Syrma SGS Technology and Lakshmi Finance Industrial, you can compare the effects of market volatilities on Syrma SGS 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 Syrma SGS with a short position of Lakshmi Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syrma SGS and Lakshmi Finance.
Diversification Opportunities for Syrma SGS and Lakshmi Finance
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Syrma and Lakshmi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Syrma SGS 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 Syrma SGS 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 Syrma SGS 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 Syrma SGS i.e., Syrma SGS and Lakshmi Finance go up and down completely randomly.
Pair Corralation between Syrma SGS and Lakshmi Finance
Assuming the 90 days trading horizon Syrma SGS Technology is expected to generate 1.3 times more return on investment than Lakshmi Finance. However, Syrma SGS is 1.3 times more volatile than Lakshmi Finance Industrial. It trades about 0.21 of its potential returns per unit of risk. Lakshmi Finance Industrial is currently generating about -0.18 per unit of risk. If you would invest 53,780 in Syrma SGS Technology on September 13, 2024 and sell it today you would earn a total of 5,810 from holding Syrma SGS Technology or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Syrma SGS Technology vs. Lakshmi Finance Industrial
Performance |
| Timeline |
| Syrma SGS Technology |
| Lakshmi Finance Indu |
Syrma SGS and Lakshmi Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syrma SGS and Lakshmi Finance
The main advantage of trading using opposite Syrma SGS and Lakshmi Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syrma SGS 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.| Syrma SGS vs. Vodafone Idea Limited | Syrma SGS vs. Yes Bank Limited | Syrma SGS vs. Indian Overseas Bank | Syrma SGS vs. Indian Oil |
| Lakshmi Finance vs. MRF Limited | Lakshmi Finance vs. JSW Holdings Limited | Lakshmi Finance vs. Maharashtra Scooters Limited | Lakshmi Finance vs. Nalwa Sons Investments |
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 CEOs Directory module to screen CEOs from public companies around the world.
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