Correlation Between Lytus Technologies and Otonomo Technologies

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

By analyzing existing cross correlation between Lytus Technologies Holdings and Otonomo Technologies, you can compare the effects of market volatilities on Lytus Technologies and Otonomo Technologies 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 Lytus Technologies with a short position of Otonomo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lytus Technologies and Otonomo Technologies.

Diversification Opportunities for Lytus Technologies and Otonomo Technologies

0.8

Correlation Coefficient

Lytus Technologies  Otonomo Technologies

Very poor diversification

The 3 months correlation between Lytus and Otonomo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lytus Technologies Holdings and Otonomo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otonomo Technologies and Lytus Technologies 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 Lytus Technologies Holdings are associated (or correlated) with Otonomo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otonomo Technologies has no effect on the direction of Lytus Technologies i.e., Lytus Technologies and Otonomo Technologies go up and down completely randomly.

Pair Corralation between Lytus Technologies and Otonomo Technologies

Considering the 90-day investment horizon Lytus Technologies Holdings is expected to under-perform the Otonomo Technologies. In addition to that, Lytus Technologies is 3.12 times more volatile than Otonomo Technologies. It trades about -0.02 of its total potential returns per unit of risk. Otonomo Technologies is currently generating about -0.01 per unit of volatility. If you would invest  44.00  in Otonomo Technologies on October 10, 2024 and sell it today you would lose (8.00) from holding Otonomo Technologies or give up 18.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	26.06%
Values	Daily Returns

Lytus Technologies Holdings  vs.  Otonomo Technologies

Lytus Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lytus Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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.

Otonomo Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Otonomo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Otonomo Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lytus Technologies and Otonomo Technologies

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

The idea behind Lytus Technologies Holdings and Otonomo Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.