Correlation Between Lumia and Concentrix
Can any of the company-specific risk be diversified away by investing in both Lumia and Concentrix 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 Concentrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Concentrix, you can compare the effects of market volatilities on Lumia and Concentrix 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 Concentrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Concentrix.
Diversification Opportunities for Lumia and Concentrix
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lumia and Concentrix is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix 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 Concentrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentrix has no effect on the direction of Lumia i.e., Lumia and Concentrix go up and down completely randomly.
Pair Corralation between Lumia and Concentrix
Assuming the 90 days trading horizon Lumia is expected to under-perform the Concentrix. In addition to that, Lumia is 2.72 times more volatile than Concentrix. It trades about -0.29 of its total potential returns per unit of risk. Concentrix is currently generating about 0.49 per unit of volatility. If you would invest 4,327 in Concentrix on November 1, 2024 and sell it today you would earn a total of 1,022 from holding Concentrix or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lumia vs. Concentrix
Performance |
| Timeline |
| Lumia |
| Concentrix |
Lumia and Concentrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Concentrix
The main advantage of trading using opposite Lumia and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Concentrix 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 Concentrix will offset losses from the drop in Concentrix's long position.The idea behind Lumia and Concentrix 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.| Concentrix vs. Genpact Limited | Concentrix vs. ExlService Holdings | Concentrix vs. Science Applications International | Concentrix vs. CLARIVATE PLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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