Correlation Between Lumia and Etron Technology
Can any of the company-specific risk be diversified away by investing in both Lumia and Etron 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 Etron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Etron Technology, you can compare the effects of market volatilities on Lumia and Etron 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 Etron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Etron Technology.
Diversification Opportunities for Lumia and Etron Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lumia and Etron is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Etron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etron Technology 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 Etron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etron Technology has no effect on the direction of Lumia i.e., Lumia and Etron Technology go up and down completely randomly.
Pair Corralation between Lumia and Etron Technology
Assuming the 90 days trading horizon Lumia is expected to generate 44.06 times more return on investment than Etron Technology. However, Lumia is 44.06 times more volatile than Etron Technology. It trades about 0.09 of its potential returns per unit of risk. Etron Technology is currently generating about -0.06 per unit of risk. If you would invest 0.00 in Lumia on November 2, 2024 and sell it today you would earn a total of 91.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.46% |
| Values | Daily Returns |
Lumia vs. Etron Technology
Performance |
| Timeline |
| Lumia |
| Etron Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lumia and Etron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Etron Technology
The main advantage of trading using opposite Lumia and Etron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Etron 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 Etron Technology will offset losses from the drop in Etron Technology's long position.The idea behind Lumia and Etron Technology 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.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |