Correlation Between Lakshmi Finance and Osia Hyper

Can any of the company-specific risk be diversified away by investing in both Lakshmi Finance and Osia Hyper 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 Osia Hyper 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 Osia Hyper Retail, you can compare the effects of market volatilities on Lakshmi Finance and Osia Hyper 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 Osia Hyper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakshmi Finance and Osia Hyper.

Diversification Opportunities for Lakshmi Finance and Osia Hyper

0.89

Correlation Coefficient

Lakshmi Finance  Osia Hyper

Very poor diversification

The 3 months correlation between Lakshmi and Osia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lakshmi Finance Industrial and Osia Hyper Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osia Hyper Retail 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 Osia Hyper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osia Hyper Retail has no effect on the direction of Lakshmi Finance i.e., Lakshmi Finance and Osia Hyper go up and down completely randomly.

Pair Corralation between Lakshmi Finance and Osia Hyper

Assuming the 90 days trading horizon Lakshmi Finance Industrial is expected to generate 0.56 times more return on investment than Osia Hyper. However, Lakshmi Finance Industrial is 1.79 times less risky than Osia Hyper. It trades about -0.13 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about -0.31 per unit of risk. If you would invest  24,392  in Lakshmi Finance Industrial on October 6, 2024 and sell it today you would lose (696.00) from holding Lakshmi Finance Industrial or give up 2.85% of portfolio value over 90 days.

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

Lakshmi Finance Industrial  vs.  Osia Hyper Retail

Lakshmi Finance Indu

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Lakshmi Finance and Osia Hyper

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

The idea behind Lakshmi Finance Industrial and Osia Hyper Retail 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.