Correlation Between Lumia and BCWORLD PHARM
Can any of the company-specific risk be diversified away by investing in both Lumia and BCWORLD PHARM 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 BCWORLD PHARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and BCWORLD PHARM Co, you can compare the effects of market volatilities on Lumia and BCWORLD PHARM 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 BCWORLD PHARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and BCWORLD PHARM.
Diversification Opportunities for Lumia and BCWORLD PHARM
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lumia and BCWORLD is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and BCWORLD PHARM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCWORLD PHARM 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 BCWORLD PHARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCWORLD PHARM has no effect on the direction of Lumia i.e., Lumia and BCWORLD PHARM go up and down completely randomly.
Pair Corralation between Lumia and BCWORLD PHARM
Assuming the 90 days trading horizon Lumia is expected to generate 38.43 times more return on investment than BCWORLD PHARM. However, Lumia is 38.43 times more volatile than BCWORLD PHARM Co. It trades about 0.08 of its potential returns per unit of risk. BCWORLD PHARM Co is currently generating about -0.01 per unit of risk. If you would invest 0.00 in Lumia on October 13, 2024 and sell it today you would earn a total of 118.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.96% |
| Values | Daily Returns |
Lumia vs. BCWORLD PHARM Co
Performance |
| Timeline |
| Lumia |
| BCWORLD PHARM |
Lumia and BCWORLD PHARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and BCWORLD PHARM
The main advantage of trading using opposite Lumia and BCWORLD PHARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, BCWORLD PHARM 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 BCWORLD PHARM will offset losses from the drop in BCWORLD PHARM's long position.The idea behind Lumia and BCWORLD PHARM Co 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.| BCWORLD PHARM vs. Oscotec | BCWORLD PHARM vs. Genexine | BCWORLD PHARM vs. Busan Industrial Co | BCWORLD PHARM vs. UNISEM Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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