Correlation Between Lumia and IShares Govt
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By analyzing existing cross correlation between Lumia and iShares Govt Bond, you can compare the effects of market volatilities on Lumia and IShares Govt 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 IShares Govt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and IShares Govt.
Diversification Opportunities for Lumia and IShares Govt
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lumia and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and iShares Govt Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Govt Bond 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 IShares Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Govt Bond has no effect on the direction of Lumia i.e., Lumia and IShares Govt go up and down completely randomly.
Pair Corralation between Lumia and IShares Govt
Assuming the 90 days trading horizon Lumia is expected to generate 241.25 times more return on investment than IShares Govt. However, Lumia is 241.25 times more volatile than iShares Govt Bond. It trades about 0.09 of its potential returns per unit of risk. iShares Govt Bond is currently generating about -0.01 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 Together |
| Strength | Insignificant |
| Accuracy | 96.26% |
| Values | Daily Returns |
Lumia vs. iShares Govt Bond
Performance |
| Timeline |
| Lumia |
| iShares Govt Bond |
Lumia and IShares Govt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and IShares Govt
The main advantage of trading using opposite Lumia and IShares Govt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, IShares Govt 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 IShares Govt will offset losses from the drop in IShares Govt's long position.The idea behind Lumia and iShares Govt Bond 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.| IShares Govt vs. iShares Global AAA AA | IShares Govt vs. iShares Smart City | IShares Govt vs. iShares Broad High | IShares Govt vs. iShares Emerging Markets |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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