Correlation Between Lumia and CDSPI Global
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By analyzing existing cross correlation between Lumia and CDSPI Global Growth, you can compare the effects of market volatilities on Lumia and CDSPI Global 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 CDSPI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and CDSPI Global.
Diversification Opportunities for Lumia and CDSPI Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lumia and CDSPI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and CDSPI Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI Global Growth 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 CDSPI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI Global Growth has no effect on the direction of Lumia i.e., Lumia and CDSPI Global go up and down completely randomly.
Pair Corralation between Lumia and CDSPI Global
Assuming the 90 days trading horizon Lumia is expected to under-perform the CDSPI Global. In addition to that, Lumia is 7.83 times more volatile than CDSPI Global Growth. It trades about -0.37 of its total potential returns per unit of risk. CDSPI Global Growth is currently generating about -0.04 per unit of volatility. If you would invest 6,108 in CDSPI Global Growth on October 12, 2024 and sell it today you would lose (44.00) from holding CDSPI Global Growth or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lumia vs. CDSPI Global Growth
Performance |
| Timeline |
| Lumia |
| CDSPI Global Growth |
Lumia and CDSPI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and CDSPI Global
The main advantage of trading using opposite Lumia and CDSPI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, CDSPI Global 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 CDSPI Global will offset losses from the drop in CDSPI Global's long position.The idea behind Lumia and CDSPI Global Growth 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.| CDSPI Global vs. Global Healthcare Income | CDSPI Global vs. CI Global Alpha | CDSPI Global vs. CI Global Alpha | CDSPI Global vs. Invesco Global Companies |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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