Correlation Between America Movil and Lumen Technologies
Can any of the company-specific risk be diversified away by investing in both America Movil and Lumen Technologies 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 America Movil and Lumen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between America Movil SAB and Lumen Technologies, you can compare the effects of market volatilities on America Movil and Lumen Technologies 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 America Movil with a short position of Lumen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and Lumen Technologies.
Diversification Opportunities for America Movil and Lumen Technologies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between America and Lumen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and Lumen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies and America Movil 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 America Movil SAB are associated (or correlated) with Lumen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies has no effect on the direction of America Movil i.e., America Movil and Lumen Technologies go up and down completely randomly.
Pair Corralation between America Movil and Lumen Technologies
Considering the 90-day investment horizon America Movil SAB is expected to generate 0.3 times more return on investment than Lumen Technologies. However, America Movil SAB is 3.38 times less risky than Lumen Technologies. It trades about 0.44 of its potential returns per unit of risk. Lumen Technologies is currently generating about -0.22 per unit of risk. If you would invest 1,367 in America Movil SAB on November 18, 2024 and sell it today you would earn a total of 161.00 from holding America Movil SAB or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
America Movil SAB vs. Lumen Technologies
Performance |
| Timeline |
| America Movil SAB |
| Lumen Technologies |
America Movil and Lumen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with America Movil and Lumen Technologies
The main advantage of trading using opposite America Movil and Lumen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Movil position performs unexpectedly, Lumen Technologies 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 Lumen Technologies will offset losses from the drop in Lumen Technologies' long position.| America Movil vs. Telefonica Brasil SA | America Movil vs. Telefonica SA ADR | America Movil vs. TIM Participacoes SA | America Movil vs. Telkom Indonesia Tbk |
| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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