Correlation Between Lumen Technologies and Fortran Corp
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Fortran Corp 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 Fortran Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Fortran Corp, you can compare the effects of market volatilities on Lumen Technologies and Fortran Corp 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 Fortran Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Fortran Corp.
Diversification Opportunities for Lumen Technologies and Fortran Corp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lumen and Fortran is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Fortran Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortran Corp 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 Fortran Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortran Corp has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Fortran Corp go up and down completely randomly.
Pair Corralation between Lumen Technologies and Fortran Corp
Given the investment horizon of 90 days Lumen Technologies is expected to generate 6.91 times less return on investment than Fortran Corp. But when comparing it to its historical volatility, Lumen Technologies is 3.27 times less risky than Fortran Corp. It trades about 0.04 of its potential returns per unit of risk. Fortran Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Fortran Corp on January 10, 2025 and sell it today you would lose (5.00) from holding Fortran Corp or give up 71.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. Fortran Corp
Performance |
| Timeline |
| Lumen Technologies |
| Fortran Corp |
Lumen Technologies and Fortran Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Fortran Corp
The main advantage of trading using opposite Lumen Technologies and Fortran Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Fortran Corp 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 Fortran Corp will offset losses from the drop in Fortran Corp's long position.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| Fortran Corp vs. T Mobile | Fortran Corp vs. Lumen Technologies | Fortran Corp vs. Verizon Communications | Fortran Corp vs. ATT Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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