Correlation Between Lumen Technologies and Ast Spacemobile
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Ast Spacemobile 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 Ast Spacemobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Ast Spacemobile, you can compare the effects of market volatilities on Lumen Technologies and Ast Spacemobile 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 Ast Spacemobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Ast Spacemobile.
Diversification Opportunities for Lumen Technologies and Ast Spacemobile
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lumen and Ast is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Ast Spacemobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ast Spacemobile 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 Ast Spacemobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ast Spacemobile has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Ast Spacemobile go up and down completely randomly.
Pair Corralation between Lumen Technologies and Ast Spacemobile
Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the Ast Spacemobile. But the stock apears to be less risky and, when comparing its historical volatility, Lumen Technologies is 1.56 times less risky than Ast Spacemobile. The stock trades about -0.12 of its potential returns per unit of risk. The Ast Spacemobile is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,164 in Ast Spacemobile on November 3, 2024 and sell it today you would lose (140.00) from holding Ast Spacemobile or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lumen Technologies vs. Ast Spacemobile
Performance |
| Timeline |
| Lumen Technologies |
| Ast Spacemobile |
Lumen Technologies and Ast Spacemobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Ast Spacemobile
The main advantage of trading using opposite Lumen Technologies and Ast Spacemobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Ast Spacemobile 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 Ast Spacemobile will offset losses from the drop in Ast Spacemobile's long position.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| Ast Spacemobile vs. Iridium Communications | Ast Spacemobile vs. Lumen Technologies | Ast Spacemobile vs. Sify Technologies Limited | Ast Spacemobile vs. InterDigital |
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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