Correlation Between Dev Information and LT Technology

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

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

Diversification Opportunities for Dev Information and LT Technology

0.54

Correlation Coefficient

Dev Information  LT Technology

Very weak diversification

The 3 months correlation between Dev and LTTS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dev Information Technology and LT Technology Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Technology Services and Dev Information 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 Dev Information Technology are associated (or correlated) with LT Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Technology Services has no effect on the direction of Dev Information i.e., Dev Information and LT Technology go up and down completely randomly.

Pair Corralation between Dev Information and LT Technology

Assuming the 90 days trading horizon Dev Information Technology is expected to generate 1.46 times more return on investment than LT Technology. However, Dev Information is 1.46 times more volatile than LT Technology Services. It trades about 0.0 of its potential returns per unit of risk. LT Technology Services is currently generating about 0.0 per unit of risk. If you would invest  11,457  in Dev Information Technology on April 23, 2025 and sell it today you would lose (139.00) from holding Dev Information Technology or give up 1.21% of portfolio value over 90 days.

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

Dev Information Technology  vs.  LT Technology Services

Dev Information Tech

Risk-Adjusted Performance

Very Weak

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

LT Technology Services

Risk-Adjusted Performance

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dev Information and LT Technology

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

The idea behind Dev Information Technology and LT Technology Services 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.