Correlation Between Lakshmi Finance and Mrs Bectors

Can any of the company-specific risk be diversified away by investing in both Lakshmi Finance and Mrs Bectors 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 Lakshmi Finance and Mrs Bectors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lakshmi Finance Industrial and Mrs Bectors Food, you can compare the effects of market volatilities on Lakshmi Finance and Mrs Bectors 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 Lakshmi Finance with a short position of Mrs Bectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakshmi Finance and Mrs Bectors.

Diversification Opportunities for Lakshmi Finance and Mrs Bectors

0.77

Correlation Coefficient

Lakshmi Finance  Mrs Bectors

Poor diversification

The 3 months correlation between Lakshmi and Mrs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lakshmi Finance Industrial and Mrs Bectors Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mrs Bectors Food and Lakshmi Finance 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 Lakshmi Finance Industrial are associated (or correlated) with Mrs Bectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mrs Bectors Food has no effect on the direction of Lakshmi Finance i.e., Lakshmi Finance and Mrs Bectors go up and down completely randomly.

Pair Corralation between Lakshmi Finance and Mrs Bectors

Assuming the 90 days trading horizon Lakshmi Finance Industrial is expected to under-perform the Mrs Bectors. In addition to that, Lakshmi Finance is 1.58 times more volatile than Mrs Bectors Food. It trades about -0.1 of its total potential returns per unit of risk. Mrs Bectors Food is currently generating about -0.04 per unit of volatility. If you would invest  162,012  in Mrs Bectors Food on December 25, 2024 and sell it today you would lose (10,457) from holding Mrs Bectors Food or give up 6.45% of portfolio value over 90 days.

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

Lakshmi Finance Industrial  vs.  Mrs Bectors Food

Lakshmi Finance Indu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lakshmi Finance Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mrs Bectors Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mrs Bectors Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mrs Bectors is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lakshmi Finance and Mrs Bectors

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

The idea behind Lakshmi Finance Industrial and Mrs Bectors Food 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.