Correlation Between Lumia and Zedcor
Can any of the company-specific risk be diversified away by investing in both Lumia and Zedcor 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 Zedcor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Zedcor Inc, you can compare the effects of market volatilities on Lumia and Zedcor 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 Zedcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Zedcor.
Diversification Opportunities for Lumia and Zedcor
Weak diversification
The 3 months correlation between Lumia and Zedcor is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Zedcor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Inc 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 Zedcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Inc has no effect on the direction of Lumia i.e., Lumia and Zedcor go up and down completely randomly.
Pair Corralation between Lumia and Zedcor
Assuming the 90 days trading horizon Lumia is expected to under-perform the Zedcor. In addition to that, Lumia is 2.27 times more volatile than Zedcor Inc. It trades about -0.31 of its total potential returns per unit of risk. Zedcor Inc is currently generating about -0.1 per unit of volatility. If you would invest 242.00 in Zedcor Inc on November 1, 2024 and sell it today you would lose (15.00) from holding Zedcor Inc or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumia vs. Zedcor Inc
Performance |
| Timeline |
| Lumia |
| Zedcor Inc |
Lumia and Zedcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Zedcor
The main advantage of trading using opposite Lumia and Zedcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Zedcor 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 Zedcor will offset losses from the drop in Zedcor's long position.The idea behind Lumia and Zedcor Inc 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.| Zedcor vs. BIO Key International | Zedcor vs. LogicMark | Zedcor vs. Knightscope | Zedcor vs. Guardforce AI 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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