Correlation Between Lumia and Sanichi Technology
Can any of the company-specific risk be diversified away by investing in both Lumia and Sanichi Technology 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 Lumia and Sanichi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Sanichi Technology Bhd, you can compare the effects of market volatilities on Lumia and Sanichi Technology 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 Lumia with a short position of Sanichi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Sanichi Technology.
Diversification Opportunities for Lumia and Sanichi Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lumia and Sanichi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Sanichi Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanichi Technology Bhd and Lumia 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 Lumia are associated (or correlated) with Sanichi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanichi Technology Bhd has no effect on the direction of Lumia i.e., Lumia and Sanichi Technology go up and down completely randomly.
Pair Corralation between Lumia and Sanichi Technology
Assuming the 90 days trading horizon Lumia is expected to generate 15.19 times more return on investment than Sanichi Technology. However, Lumia is 15.19 times more volatile than Sanichi Technology Bhd. It trades about 0.14 of its potential returns per unit of risk. Sanichi Technology Bhd is currently generating about 0.01 per unit of risk. If you would invest 0.00 in Lumia on October 29, 2024 and sell it today you would earn a total of 88.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Lumia vs. Sanichi Technology Bhd
Performance |
| Timeline |
| Lumia |
| Sanichi Technology Bhd |
Lumia and Sanichi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Sanichi Technology
The main advantage of trading using opposite Lumia and Sanichi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Sanichi Technology 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 Sanichi Technology will offset losses from the drop in Sanichi Technology's long position.The idea behind Lumia and Sanichi Technology Bhd 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.| Sanichi Technology vs. Greatech Technology Bhd | Sanichi Technology vs. Uwc Bhd | Sanichi Technology vs. Genetec Technology Bhd | Sanichi Technology vs. PIE Industrial Bhd |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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