Correlation Between LUMI GRUPPEN and Information Services
Can any of the company-specific risk be diversified away by investing in both LUMI GRUPPEN and Information Services 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 Information Services 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 Information Services International Dentsu, you can compare the effects of market volatilities on LUMI GRUPPEN and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUMI GRUPPEN and Information Services.
Diversification Opportunities for LUMI GRUPPEN and Information Services
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LUMI and Information is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding LUMI GRUPPEN AS and Information Services Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of LUMI GRUPPEN i.e., LUMI GRUPPEN and Information Services go up and down completely randomly.
Pair Corralation between LUMI GRUPPEN and Information Services
Assuming the 90 days horizon LUMI GRUPPEN AS is expected to generate 1.77 times more return on investment than Information Services. However, LUMI GRUPPEN is 1.77 times more volatile than Information Services International Dentsu. It trades about 0.24 of its potential returns per unit of risk. Information Services International Dentsu is currently generating about -0.23 per unit of risk. If you would invest 100.00 in LUMI GRUPPEN AS on October 13, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LUMI GRUPPEN AS vs. Information Services Internati
Performance |
| Timeline |
| LUMI GRUPPEN AS |
| Information Services |
LUMI GRUPPEN and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LUMI GRUPPEN and Information Services
The main advantage of trading using opposite LUMI GRUPPEN and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUMI GRUPPEN position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| LUMI GRUPPEN vs. Information Services International Dentsu | LUMI GRUPPEN vs. Automatic Data Processing | LUMI GRUPPEN vs. Transport International Holdings | LUMI GRUPPEN vs. DICKS Sporting Goods |
| Information Services vs. Japan Asia Investment | Information Services vs. SCOTT TECHNOLOGY | Information Services vs. ECHO INVESTMENT ZY | Information Services vs. SMA Solar Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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