Correlation Between Lumine and Power Fi
Can any of the company-specific risk be diversified away by investing in both Lumine and Power Fi 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 Lumine and Power Fi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumine Group and Power Fi 440, you can compare the effects of market volatilities on Lumine and Power Fi 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 Lumine with a short position of Power Fi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumine and Power Fi.
Diversification Opportunities for Lumine and Power Fi
Poor diversification
The 3 months correlation between Lumine and Power is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lumine Group and Power Fi 440 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Fi 440 and Lumine 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 Lumine Group are associated (or correlated) with Power Fi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Fi 440 has no effect on the direction of Lumine i.e., Lumine and Power Fi go up and down completely randomly.
Pair Corralation between Lumine and Power Fi
Assuming the 90 days horizon Lumine Group is expected to generate 3.26 times more return on investment than Power Fi. However, Lumine is 3.26 times more volatile than Power Fi 440. It trades about 0.17 of its potential returns per unit of risk. Power Fi 440 is currently generating about 0.11 per unit of risk. If you would invest 3,465 in Lumine Group on September 12, 2024 and sell it today you would earn a total of 983.00 from holding Lumine Group or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumine Group vs. Power Fi 440
Performance |
| Timeline |
| Lumine Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Power Fi 440 |
Lumine and Power Fi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumine and Power Fi
The main advantage of trading using opposite Lumine and Power Fi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumine position performs unexpectedly, Power Fi 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 Power Fi will offset losses from the drop in Power Fi's long position.| Lumine vs. Topicus | Lumine vs. Constellation Software | Lumine vs. Brookfield | Lumine vs. Brookfield Asset Management |
| Power Fi vs. SalesforceCom CDR | Power Fi vs. Forsys Metals Corp | Power Fi vs. Doman Building Materials | Power Fi vs. NeXGold Mining Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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