Correlation Between IDP EDUCATION and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both IDP EDUCATION and LUMI GRUPPEN 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 IDP EDUCATION and LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDP EDUCATION LTD and LUMI GRUPPEN AS, you can compare the effects of market volatilities on IDP EDUCATION and LUMI GRUPPEN 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 IDP EDUCATION with a short position of LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDP EDUCATION and LUMI GRUPPEN.
Diversification Opportunities for IDP EDUCATION and LUMI GRUPPEN
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IDP and LUMI is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding IDP EDUCATION LTD and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS and IDP EDUCATION 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 IDP EDUCATION LTD are associated (or correlated) with LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of IDP EDUCATION i.e., IDP EDUCATION and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between IDP EDUCATION and LUMI GRUPPEN
Assuming the 90 days horizon IDP EDUCATION is expected to generate 2.45 times less return on investment than LUMI GRUPPEN. In addition to that, IDP EDUCATION is 1.5 times more volatile than LUMI GRUPPEN AS. It trades about 0.07 of its total potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about 0.24 per unit of volatility. If you would invest 100.00 in LUMI GRUPPEN AS on October 12, 2024 and sell it today you would earn a total of 11.00 from holding LUMI GRUPPEN AS or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
IDP EDUCATION LTD vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| IDP EDUCATION LTD |
| LUMI GRUPPEN AS |
IDP EDUCATION and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDP EDUCATION and LUMI GRUPPEN
The main advantage of trading using opposite IDP EDUCATION and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDP EDUCATION position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| IDP EDUCATION vs. Chengdu PUTIAN Telecommunications | IDP EDUCATION vs. Kingdee International Software | IDP EDUCATION vs. Entravision Communications | IDP EDUCATION vs. Telecom Argentina SA |
| LUMI GRUPPEN vs. TT Electronics PLC | LUMI GRUPPEN vs. Penta Ocean Construction Co | LUMI GRUPPEN vs. Meiko Electronics Co | LUMI GRUPPEN vs. Daito Trust Construction |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |