Correlation Between Lumia and PARKER
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By analyzing existing cross correlation between Lumia and PARKER HANNIFIN P 41, you can compare the effects of market volatilities on Lumia and PARKER 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 PARKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and PARKER.
Diversification Opportunities for Lumia and PARKER
Very good diversification
The 3 months correlation between Lumia and PARKER is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and PARKER HANNIFIN P 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKER HANNIFIN P 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 PARKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKER HANNIFIN P has no effect on the direction of Lumia i.e., Lumia and PARKER go up and down completely randomly.
Pair Corralation between Lumia and PARKER
Assuming the 90 days trading horizon Lumia is expected to under-perform the PARKER. In addition to that, Lumia is 3.35 times more volatile than PARKER HANNIFIN P 41. It trades about -0.33 of its total potential returns per unit of risk. PARKER HANNIFIN P 41 is currently generating about -0.15 per unit of volatility. If you would invest 7,955 in PARKER HANNIFIN P 41 on November 2, 2024 and sell it today you would lose (312.00) from holding PARKER HANNIFIN P 41 or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Lumia vs. PARKER HANNIFIN P 41
Performance |
| Timeline |
| Lumia |
| PARKER HANNIFIN P |
Lumia and PARKER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and PARKER
The main advantage of trading using opposite Lumia and PARKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, PARKER 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 PARKER will offset losses from the drop in PARKER's long position.The idea behind Lumia and PARKER HANNIFIN P 41 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.| PARKER vs. AEP TEX INC | PARKER vs. US BANK NATIONAL | PARKER vs. Albertsons Companies | PARKER vs. Innovation Beverage 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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