Correlation Between LT Technology and Popular Vehicles

Can any of the company-specific risk be diversified away by investing in both LT Technology and Popular Vehicles 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 LT Technology and Popular Vehicles into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LT Technology Services and Popular Vehicles and, you can compare the effects of market volatilities on LT Technology and Popular Vehicles 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 LT Technology with a short position of Popular Vehicles. Check out your portfolio center. Please also check ongoing floating volatility patterns of LT Technology and Popular Vehicles.

Diversification Opportunities for LT Technology and Popular Vehicles

0.19

Correlation Coefficient

LT Technology  Popular Vehicles

Average diversification

The 3 months correlation between LTTS and Popular is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding LT Technology Services and Popular Vehicles and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular Vehicles and LT Technology 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 LT Technology Services are associated (or correlated) with Popular Vehicles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular Vehicles has no effect on the direction of LT Technology i.e., LT Technology and Popular Vehicles go up and down completely randomly.

Pair Corralation between LT Technology and Popular Vehicles

Assuming the 90 days trading horizon LT Technology Services is expected to generate 0.77 times more return on investment than Popular Vehicles. However, LT Technology Services is 1.3 times less risky than Popular Vehicles. It trades about 0.06 of its potential returns per unit of risk. Popular Vehicles and is currently generating about -0.12 per unit of risk. If you would invest  316,162  in LT Technology Services on October 11, 2024 and sell it today you would earn a total of  174,488  from holding LT Technology Services or generate 55.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.15%
Values	Daily Returns

LT Technology Services  vs.  Popular Vehicles and

LT Technology Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LT Technology Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, LT Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Popular Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Popular Vehicles and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Pair Trading with LT Technology and Popular Vehicles

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

The idea behind LT Technology Services and Popular Vehicles and 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 Anywhere module to track or share privately all of your investments from the convenience of any device.