Correlation Between Casa Systems and Lumentum Holdings
Can any of the company-specific risk be diversified away by investing in both Casa Systems and Lumentum Holdings 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 Casa Systems and Lumentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casa Systems and Lumentum Holdings, you can compare the effects of market volatilities on Casa Systems and Lumentum Holdings 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 Casa Systems with a short position of Lumentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casa Systems and Lumentum Holdings.
Diversification Opportunities for Casa Systems and Lumentum Holdings
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Casa and Lumentum is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Casa Systems and Lumentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumentum Holdings and Casa Systems 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 Casa Systems are associated (or correlated) with Lumentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumentum Holdings has no effect on the direction of Casa Systems i.e., Casa Systems and Lumentum Holdings go up and down completely randomly.
Pair Corralation between Casa Systems and Lumentum Holdings
If you would invest 4,421 in Lumentum Holdings on August 31, 2024 and sell it today you would earn a total of 4,276 from holding Lumentum Holdings or generate 96.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Casa Systems vs. Lumentum Holdings
Performance |
| Timeline |
| Casa Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lumentum Holdings |
Casa Systems and Lumentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casa Systems and Lumentum Holdings
The main advantage of trading using opposite Casa Systems and Lumentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casa Systems position performs unexpectedly, Lumentum Holdings 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 Lumentum Holdings will offset losses from the drop in Lumentum Holdings' long position.| Casa Systems vs. ADTRAN Inc | Casa Systems vs. Comtech Telecommunications Corp | Casa Systems vs. Digi International | Casa Systems vs. KVH Industries |
| Lumentum Holdings vs. NETGEAR | Lumentum Holdings vs. KVH Industries | Lumentum Holdings vs. Telesat Corp | Lumentum Holdings vs. Juniper Networks |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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