Correlation Between Lumen Technologies and Pegasus Tel
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Pegasus Tel 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 Pegasus Tel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Pegasus Tel, you can compare the effects of market volatilities on Lumen Technologies and Pegasus Tel 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 Pegasus Tel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Pegasus Tel.
Diversification Opportunities for Lumen Technologies and Pegasus Tel
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lumen and Pegasus is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Pegasus Tel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Tel 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 Pegasus Tel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Tel has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Pegasus Tel go up and down completely randomly.
Pair Corralation between Lumen Technologies and Pegasus Tel
Given the investment horizon of 90 days Lumen Technologies is expected to generate 0.69 times more return on investment than Pegasus Tel. However, Lumen Technologies is 1.45 times less risky than Pegasus Tel. It trades about 0.01 of its potential returns per unit of risk. Pegasus Tel is currently generating about -0.01 per unit of risk. If you would invest 748.00 in Lumen Technologies on September 3, 2024 and sell it today you would lose (14.00) from holding Lumen Technologies or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. Pegasus Tel
Performance |
| Timeline |
| Lumen Technologies |
| Pegasus Tel |
Lumen Technologies and Pegasus Tel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Pegasus Tel
The main advantage of trading using opposite Lumen Technologies and Pegasus Tel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Pegasus Tel 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 Pegasus Tel will offset losses from the drop in Pegasus Tel's long position.| Lumen Technologies vs. Highway Holdings Limited | Lumen Technologies vs. QCR Holdings | Lumen Technologies vs. Partner Communications | Lumen Technologies vs. Acumen Pharmaceuticals |
| Pegasus Tel vs. BCE Inc | Pegasus Tel vs. Axiologix | Pegasus Tel vs. Advanced Info Service | Pegasus Tel vs. SwissCom AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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