Correlation Between Lumia and Plutonian Acquisition
Can any of the company-specific risk be diversified away by investing in both Lumia and Plutonian Acquisition 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 Plutonian Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Plutonian Acquisition Corp, you can compare the effects of market volatilities on Lumia and Plutonian Acquisition 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 Plutonian Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Plutonian Acquisition.
Diversification Opportunities for Lumia and Plutonian Acquisition
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lumia and Plutonian is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Plutonian Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plutonian Acquisition 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 Plutonian Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plutonian Acquisition has no effect on the direction of Lumia i.e., Lumia and Plutonian Acquisition go up and down completely randomly.
Pair Corralation between Lumia and Plutonian Acquisition
Assuming the 90 days trading horizon Lumia is expected to generate 7.88 times more return on investment than Plutonian Acquisition. However, Lumia is 7.88 times more volatile than Plutonian Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Plutonian Acquisition Corp is currently generating about -0.04 per unit of risk. If you would invest 0.00 in Lumia on October 14, 2024 and sell it today you would earn a total of 114.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.51% |
| Values | Daily Returns |
Lumia vs. Plutonian Acquisition Corp
Performance |
| Timeline |
| Lumia |
| Plutonian Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lumia and Plutonian Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Plutonian Acquisition
The main advantage of trading using opposite Lumia and Plutonian Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Plutonian Acquisition 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 Plutonian Acquisition will offset losses from the drop in Plutonian Acquisition's long position.The idea behind Lumia and Plutonian Acquisition Corp 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.| Plutonian Acquisition vs. MGIC Investment Corp | Plutonian Acquisition vs. Small Cap Premium | Plutonian Acquisition vs. Bowen Acquisition Corp | Plutonian Acquisition vs. National CineMedia |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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