Correlation Between Infotel SA and Lumibird
Can any of the company-specific risk be diversified away by investing in both Infotel SA and Lumibird 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 Infotel SA and Lumibird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infotel SA and Lumibird SA, you can compare the effects of market volatilities on Infotel SA and Lumibird 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 Infotel SA with a short position of Lumibird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infotel SA and Lumibird.
Diversification Opportunities for Infotel SA and Lumibird
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Infotel and Lumibird is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Infotel SA and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Infotel SA 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 Infotel SA are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Infotel SA i.e., Infotel SA and Lumibird go up and down completely randomly.
Pair Corralation between Infotel SA and Lumibird
Assuming the 90 days trading horizon Infotel SA is expected to under-perform the Lumibird. But the stock apears to be less risky and, when comparing its historical volatility, Infotel SA is 4.88 times less risky than Lumibird. The stock trades about -0.17 of its potential returns per unit of risk. The Lumibird SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 698.00 in Lumibird SA on September 1, 2024 and sell it today you would earn a total of 232.00 from holding Lumibird SA or generate 33.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Infotel SA vs. Lumibird SA
Performance |
| Timeline |
| Infotel SA |
| Lumibird SA |
Infotel SA and Lumibird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infotel SA and Lumibird
The main advantage of trading using opposite Infotel SA and Lumibird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infotel SA position performs unexpectedly, Lumibird 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 Lumibird will offset losses from the drop in Lumibird's long position.The idea behind Infotel SA and Lumibird SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lumibird vs. Esker SA | Lumibird vs. Xilam Animation | Lumibird vs. Claranova SE | Lumibird vs. Prodways Group SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |