Correlation Between LUMI GRUPPEN and TITANIUM TRANSPORTGROUP
Can any of the company-specific risk be diversified away by investing in both LUMI GRUPPEN and TITANIUM TRANSPORTGROUP 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 LUMI GRUPPEN and TITANIUM TRANSPORTGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUMI GRUPPEN AS and TITANIUM TRANSPORTGROUP, you can compare the effects of market volatilities on LUMI GRUPPEN and TITANIUM TRANSPORTGROUP 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 LUMI GRUPPEN with a short position of TITANIUM TRANSPORTGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUMI GRUPPEN and TITANIUM TRANSPORTGROUP.
Diversification Opportunities for LUMI GRUPPEN and TITANIUM TRANSPORTGROUP
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LUMI and TITANIUM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LUMI GRUPPEN AS and TITANIUM TRANSPORTGROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITANIUM TRANSPORTGROUP and LUMI GRUPPEN 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 LUMI GRUPPEN AS are associated (or correlated) with TITANIUM TRANSPORTGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITANIUM TRANSPORTGROUP has no effect on the direction of LUMI GRUPPEN i.e., LUMI GRUPPEN and TITANIUM TRANSPORTGROUP go up and down completely randomly.
Pair Corralation between LUMI GRUPPEN and TITANIUM TRANSPORTGROUP
Assuming the 90 days horizon LUMI GRUPPEN AS is expected to generate 2.01 times more return on investment than TITANIUM TRANSPORTGROUP. However, LUMI GRUPPEN is 2.01 times more volatile than TITANIUM TRANSPORTGROUP. It trades about -0.03 of its potential returns per unit of risk. TITANIUM TRANSPORTGROUP is currently generating about -0.1 per unit of risk. If you would invest 111.00 in LUMI GRUPPEN AS on November 7, 2024 and sell it today you would lose (3.00) from holding LUMI GRUPPEN AS or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LUMI GRUPPEN AS vs. TITANIUM TRANSPORTGROUP
Performance |
| Timeline |
| LUMI GRUPPEN AS |
| TITANIUM TRANSPORTGROUP |
LUMI GRUPPEN and TITANIUM TRANSPORTGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LUMI GRUPPEN and TITANIUM TRANSPORTGROUP
The main advantage of trading using opposite LUMI GRUPPEN and TITANIUM TRANSPORTGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUMI GRUPPEN position performs unexpectedly, TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP will offset losses from the drop in TITANIUM TRANSPORTGROUP's long position.| LUMI GRUPPEN vs. Hua Hong Semiconductor | LUMI GRUPPEN vs. RCI Hospitality Holdings | LUMI GRUPPEN vs. Tower Semiconductor | LUMI GRUPPEN vs. ELMOS SEMICONDUCTOR |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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