Correlation Between Lumen Technologies and America Movil
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and America Movil 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 Lumen Technologies and America Movil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and America Movil SAB, you can compare the effects of market volatilities on Lumen Technologies and America Movil 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 Lumen Technologies with a short position of America Movil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and America Movil.
Diversification Opportunities for Lumen Technologies and America Movil
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lumen and America is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and America Movil SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Movil SAB and Lumen Technologies 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 Lumen Technologies are associated (or correlated) with America Movil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Movil SAB has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and America Movil go up and down completely randomly.
Pair Corralation between Lumen Technologies and America Movil
Given the investment horizon of 90 days Lumen Technologies is expected to generate 4.68 times more return on investment than America Movil. However, Lumen Technologies is 4.68 times more volatile than America Movil SAB. It trades about 0.04 of its potential returns per unit of risk. America Movil SAB is currently generating about -0.01 per unit of risk. If you would invest 520.00 in Lumen Technologies on August 24, 2024 and sell it today you would earn a total of 265.00 from holding Lumen Technologies or generate 50.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. America Movil SAB
Performance |
| Timeline |
| Lumen Technologies |
| America Movil SAB |
Lumen Technologies and America Movil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and America Movil
The main advantage of trading using opposite Lumen Technologies and America Movil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, America Movil 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 America Movil will offset losses from the drop in America Movil's long position.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| America Movil vs. Telefonica Brasil SA | America Movil vs. Telefonica SA ADR | America Movil vs. TIM Participacoes SA | America Movil vs. Telkom Indonesia Tbk |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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