Correlation Between Lumia and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Lumia and Transamerica Emerging 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 Transamerica Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Transamerica Emerging Markets, you can compare the effects of market volatilities on Lumia and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Transamerica Emerging.
Diversification Opportunities for Lumia and Transamerica Emerging
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lumia and Transamerica is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Lumia i.e., Lumia and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Lumia and Transamerica Emerging
Assuming the 90 days trading horizon Lumia is expected to under-perform the Transamerica Emerging. In addition to that, Lumia is 9.71 times more volatile than Transamerica Emerging Markets. It trades about -0.14 of its total potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.08 per unit of volatility. If you would invest 798.00 in Transamerica Emerging Markets on October 20, 2024 and sell it today you would lose (10.00) from holding Transamerica Emerging Markets or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lumia vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Lumia |
| Transamerica Emerging |
Lumia and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Transamerica Emerging
The main advantage of trading using opposite Lumia and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.The idea behind Lumia and Transamerica Emerging Markets 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.| Transamerica Emerging vs. Enhanced Fixed Income | Transamerica Emerging vs. Artisan Select Equity | Transamerica Emerging vs. Locorr Dynamic Equity | Transamerica Emerging vs. T Rowe Price |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings 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 |