Correlation Between Daily Journal and Lumen Technologies
Can any of the company-specific risk be diversified away by investing in both Daily Journal 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 Daily Journal and Lumen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daily Journal Corp and Lumen Technologies, you can compare the effects of market volatilities on Daily Journal 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 Daily Journal with a short position of Lumen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Lumen Technologies.
Diversification Opportunities for Daily Journal and Lumen Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daily and Lumen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Lumen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies and Daily Journal 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 Daily Journal Corp 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 Daily Journal i.e., Daily Journal and Lumen Technologies go up and down completely randomly.
Pair Corralation between Daily Journal and Lumen Technologies
Given the investment horizon of 90 days Daily Journal is expected to generate 3.84 times less return on investment than Lumen Technologies. But when comparing it to its historical volatility, Daily Journal Corp is 3.37 times less risky than Lumen Technologies. It trades about 0.1 of its potential returns per unit of risk. Lumen Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Lumen Technologies on August 26, 2024 and sell it today you would earn a total of 657.00 from holding Lumen Technologies or generate 501.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daily Journal Corp vs. Lumen Technologies
Performance |
| Timeline |
| Daily Journal Corp |
| Lumen Technologies |
Daily Journal and Lumen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daily Journal and Lumen Technologies
The main advantage of trading using opposite Daily Journal and Lumen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal 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.| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct Corp |
| 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |