Correlation Between Lumia and Smarttech247 Group
Can any of the company-specific risk be diversified away by investing in both Lumia and Smarttech247 Group 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 Smarttech247 Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Smarttech247 Group PLC, you can compare the effects of market volatilities on Lumia and Smarttech247 Group 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 Smarttech247 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Smarttech247 Group.
Diversification Opportunities for Lumia and Smarttech247 Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lumia and Smarttech247 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Smarttech247 Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smarttech247 Group PLC 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 Smarttech247 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smarttech247 Group PLC has no effect on the direction of Lumia i.e., Lumia and Smarttech247 Group go up and down completely randomly.
Pair Corralation between Lumia and Smarttech247 Group
Assuming the 90 days trading horizon Lumia is expected to generate 31.4 times more return on investment than Smarttech247 Group. However, Lumia is 31.4 times more volatile than Smarttech247 Group PLC. It trades about 0.2 of its potential returns per unit of risk. Smarttech247 Group PLC is currently generating about 0.04 per unit of risk. If you would invest 0.00 in Lumia on October 11, 2024 and sell it today you would earn a total of 120.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lumia vs. Smarttech247 Group PLC
Performance |
| Timeline |
| Lumia |
| Smarttech247 Group PLC |
Lumia and Smarttech247 Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Smarttech247 Group
The main advantage of trading using opposite Lumia and Smarttech247 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Smarttech247 Group 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 Smarttech247 Group will offset losses from the drop in Smarttech247 Group's long position.The idea behind Lumia and Smarttech247 Group PLC 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.| Smarttech247 Group vs. Celebrus Technologies plc | Smarttech247 Group vs. Coeur Mining | Smarttech247 Group vs. Allianz Technology Trust | Smarttech247 Group vs. Made Tech Group |
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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