Correlation Between Lytus Technologies and RenoWorks Software

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

Diversification Opportunities for Lytus Technologies and RenoWorks Software

-0.05

Correlation Coefficient

Lytus Technologies  RenoWorks Software

Good diversification

The 3 months correlation between Lytus and RenoWorks is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lytus Technologies Holdings and RenoWorks Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenoWorks Software 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 RenoWorks Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenoWorks Software has no effect on the direction of Lytus Technologies i.e., Lytus Technologies and RenoWorks Software go up and down completely randomly.

Pair Corralation between Lytus Technologies and RenoWorks Software

Considering the 90-day investment horizon Lytus Technologies Holdings is expected to under-perform the RenoWorks Software. In addition to that, Lytus Technologies is 11.46 times more volatile than RenoWorks Software. It trades about -0.12 of its total potential returns per unit of risk. RenoWorks Software is currently generating about 0.06 per unit of volatility. If you would invest  18.00  in RenoWorks Software on December 29, 2024 and sell it today you would earn a total of  1.00  from holding RenoWorks Software or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Lytus Technologies Holdings  vs.  RenoWorks Software

Lytus Technologies

Risk-Adjusted Performance

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 conflicting 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.

RenoWorks Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RenoWorks Software are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, RenoWorks Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lytus Technologies and RenoWorks Software

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

The idea behind Lytus Technologies Holdings and RenoWorks Software 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.