Correlation Between Lycos Energy and Lumine
Can any of the company-specific risk be diversified away by investing in both Lycos Energy and Lumine 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 Lycos Energy and Lumine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lycos Energy and Lumine Group, you can compare the effects of market volatilities on Lycos Energy and Lumine 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 Lycos Energy with a short position of Lumine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lycos Energy and Lumine.
Diversification Opportunities for Lycos Energy and Lumine
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lycos and Lumine is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy and Lumine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumine Group and Lycos Energy 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 Lycos Energy are associated (or correlated) with Lumine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumine Group has no effect on the direction of Lycos Energy i.e., Lycos Energy and Lumine go up and down completely randomly.
Pair Corralation between Lycos Energy and Lumine
Assuming the 90 days horizon Lycos Energy is expected to under-perform the Lumine. But the stock apears to be less risky and, when comparing its historical volatility, Lycos Energy is 1.01 times less risky than Lumine. The stock trades about -0.02 of its potential returns per unit of risk. The Lumine Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,809 in Lumine Group on December 24, 2024 and sell it today you would earn a total of 250.00 from holding Lumine Group or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lycos Energy vs. Lumine Group
Performance |
| Timeline |
| Lycos Energy |
| Lumine Group |
Lycos Energy and Lumine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lycos Energy and Lumine
The main advantage of trading using opposite Lycos Energy and Lumine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy position performs unexpectedly, Lumine 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 Lumine will offset losses from the drop in Lumine's long position.| Lycos Energy vs. MAG Silver Corp | Lycos Energy vs. Evertz Technologies Limited | Lycos Energy vs. NeXGold Mining Corp | Lycos Energy vs. Vizsla Silver Corp |
| Lumine vs. Topicus | Lumine vs. Constellation Software | Lumine vs. Brookfield | Lumine vs. Brookfield Asset Management |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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