Correlation Between Lumentum Holdings and Minim
Can any of the company-specific risk be diversified away by investing in both Lumentum Holdings and Minim 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 Lumentum Holdings and Minim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumentum Holdings and Minim Inc, you can compare the effects of market volatilities on Lumentum Holdings and Minim 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 Lumentum Holdings with a short position of Minim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumentum Holdings and Minim.
Diversification Opportunities for Lumentum Holdings and Minim
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lumentum and Minim is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lumentum Holdings and Minim Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minim Inc and Lumentum Holdings 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 Lumentum Holdings are associated (or correlated) with Minim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minim Inc has no effect on the direction of Lumentum Holdings i.e., Lumentum Holdings and Minim go up and down completely randomly.
Pair Corralation between Lumentum Holdings and Minim
Given the investment horizon of 90 days Lumentum Holdings is expected to generate 8.23 times less return on investment than Minim. But when comparing it to its historical volatility, Lumentum Holdings is 7.73 times less risky than Minim. It trades about 0.04 of its potential returns per unit of risk. Minim Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Minim Inc on August 27, 2024 and sell it today you would lose (414.00) from holding Minim Inc or give up 61.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.1% |
| Values | Daily Returns |
Lumentum Holdings vs. Minim Inc
Performance |
| Timeline |
| Lumentum Holdings |
| Minim Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lumentum Holdings and Minim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumentum Holdings and Minim
The main advantage of trading using opposite Lumentum Holdings and Minim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumentum Holdings position performs unexpectedly, Minim 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 Minim will offset losses from the drop in Minim's long position.| Lumentum Holdings vs. Ichor Holdings | Lumentum Holdings vs. Fabrinet | Lumentum Holdings vs. Hello Group | Lumentum Holdings vs. Ultra Clean Holdings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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