Correlation Between Lumia and FFW
Can any of the company-specific risk be diversified away by investing in both Lumia and FFW 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 FFW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and FFW Corporation, you can compare the effects of market volatilities on Lumia and FFW 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 FFW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and FFW.
Diversification Opportunities for Lumia and FFW
Pay attention - limited upside
The 3 months correlation between Lumia and FFW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation 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 FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of Lumia i.e., Lumia and FFW go up and down completely randomly.
Pair Corralation between Lumia and FFW
Assuming the 90 days trading horizon Lumia is expected to generate 12.91 times more return on investment than FFW. However, Lumia is 12.91 times more volatile than FFW Corporation. It trades about 0.04 of its potential returns per unit of risk. FFW Corporation is currently generating about 0.01 per unit of risk. If you would invest 0.00 in Lumia on October 21, 2024 and sell it today you would earn a total of 107.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.21% |
| Values | Daily Returns |
Lumia vs. FFW Corp.
Performance |
| Timeline |
| Lumia |
| FFW Corporation |
Lumia and FFW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and FFW
The main advantage of trading using opposite Lumia and FFW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, FFW 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 FFW will offset losses from the drop in FFW's long position.The idea behind Lumia and FFW Corporation 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.| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW vs. Eagle Financial Services |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Transaction History View history of all your transactions and understand their impact on performance |