Correlation Between Lytus Technologies and Exela Technologies

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

Diversification Opportunities for Lytus Technologies and Exela Technologies

0.39

Correlation Coefficient

Lytus Technologies  Exela Technologies

Weak diversification

The 3 months correlation between Lytus and Exela is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lytus Technologies Holdings and Exela Technologies Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of Lytus Technologies i.e., Lytus Technologies and Exela Technologies go up and down completely randomly.

Pair Corralation between Lytus Technologies and Exela Technologies

Considering the 90-day investment horizon Lytus Technologies Holdings is expected to under-perform the Exela Technologies. In addition to that, Lytus Technologies is 1.02 times more volatile than Exela Technologies Preferred. It trades about -0.14 of its total potential returns per unit of risk. Exela Technologies Preferred is currently generating about -0.1 per unit of volatility. If you would invest  150.00  in Exela Technologies Preferred on June 21, 2024 and sell it today you would lose (14.00) from holding Exela Technologies Preferred or give up 9.33% of portfolio value over 90 days.

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

Lytus Technologies Holdings  vs.  Exela Technologies Preferred

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 comparatively stable basic indicators, Lytus Technologies is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in October 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Lytus Technologies and Exela Technologies

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

The idea behind Lytus Technologies Holdings and Exela Technologies Preferred 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.