Correlation Between Lumen Technologies and GoldMining
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and GoldMining 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 Lumen Technologies and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and GoldMining, you can compare the effects of market volatilities on Lumen Technologies and GoldMining 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 Lumen Technologies with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and GoldMining.
Diversification Opportunities for Lumen Technologies and GoldMining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lumen and GoldMining is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Lumen 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 Lumen Technologies are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and GoldMining go up and down completely randomly.
Pair Corralation between Lumen Technologies and GoldMining
Assuming the 90 days trading horizon Lumen Technologies is expected to under-perform the GoldMining. In addition to that, Lumen Technologies is 1.04 times more volatile than GoldMining. It trades about -0.09 of its total potential returns per unit of risk. GoldMining is currently generating about -0.02 per unit of volatility. If you would invest 115.00 in GoldMining on October 20, 2024 and sell it today you would lose (1.00) from holding GoldMining or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Lumen Technologies vs. GoldMining
Performance |
| Timeline |
| Lumen Technologies |
| GoldMining |
Lumen Technologies and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and GoldMining
The main advantage of trading using opposite Lumen Technologies and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Lumen Technologies vs. Clean Power Hydrogen | Lumen Technologies vs. Fevertree Drinks Plc | Lumen Technologies vs. Grieg Seafood | Lumen Technologies vs. Tyson Foods Cl |
| GoldMining vs. Kinnevik Investment AB | GoldMining vs. Southwest Airlines Co | GoldMining vs. Lindsell Train Investment | GoldMining vs. Bankers Investment Trust |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |