Correlation Between Indian Card and Laxmi Organic

Can any of the company-specific risk be diversified away by investing in both Indian Card and Laxmi Organic 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 Indian Card and Laxmi Organic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indian Card Clothing and Laxmi Organic Industries, you can compare the effects of market volatilities on Indian Card and Laxmi Organic 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 Indian Card with a short position of Laxmi Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Card and Laxmi Organic.

Diversification Opportunities for Indian Card and Laxmi Organic

-0.37

Correlation Coefficient

Indian Card  Laxmi Organic

Very good diversification

The 3 months correlation between Indian and Laxmi is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Indian Card Clothing and Laxmi Organic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laxmi Organic Industries and Indian Card 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 Indian Card Clothing are associated (or correlated) with Laxmi Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laxmi Organic Industries has no effect on the direction of Indian Card i.e., Indian Card and Laxmi Organic go up and down completely randomly.

Pair Corralation between Indian Card and Laxmi Organic

Assuming the 90 days trading horizon Indian Card Clothing is expected to generate 3.9 times more return on investment than Laxmi Organic. However, Indian Card is 3.9 times more volatile than Laxmi Organic Industries. It trades about 0.09 of its potential returns per unit of risk. Laxmi Organic Industries is currently generating about -0.34 per unit of risk. If you would invest  28,835  in Indian Card Clothing on October 6, 2024 and sell it today you would earn a total of  2,245  from holding Indian Card Clothing or generate 7.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Indian Card Clothing  vs.  Laxmi Organic Industries

Indian Card Clothing

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indian Card Clothing are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Indian Card exhibited solid returns over the last few months and may actually be approaching a breakup point.

Laxmi Organic Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Laxmi Organic Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Indian Card and Laxmi Organic

The main advantage of trading using opposite Indian Card and Laxmi Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Card position performs unexpectedly, Laxmi Organic 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 Laxmi Organic will offset losses from the drop in Laxmi Organic's long position.

The idea behind Indian Card Clothing and Laxmi Organic Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.