Correlation Between CHAMPION IRON and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both CHAMPION IRON and LUMI GRUPPEN 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 CHAMPION IRON and LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHAMPION IRON and LUMI GRUPPEN AS, you can compare the effects of market volatilities on CHAMPION IRON and LUMI GRUPPEN 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 CHAMPION IRON with a short position of LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAMPION IRON and LUMI GRUPPEN.
Diversification Opportunities for CHAMPION IRON and LUMI GRUPPEN
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHAMPION and LUMI is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CHAMPION IRON and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS and CHAMPION IRON 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 CHAMPION IRON are associated (or correlated) with LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of CHAMPION IRON i.e., CHAMPION IRON and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between CHAMPION IRON and LUMI GRUPPEN
Assuming the 90 days trading horizon CHAMPION IRON is expected to under-perform the LUMI GRUPPEN. But the stock apears to be less risky and, when comparing its historical volatility, CHAMPION IRON is 2.09 times less risky than LUMI GRUPPEN. The stock trades about 0.0 of its potential returns per unit of risk. The LUMI GRUPPEN AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 105.00 in LUMI GRUPPEN AS on November 1, 2024 and sell it today you would earn a total of 4.00 from holding LUMI GRUPPEN AS or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHAMPION IRON vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| CHAMPION IRON |
| LUMI GRUPPEN AS |
CHAMPION IRON and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAMPION IRON and LUMI GRUPPEN
The main advantage of trading using opposite CHAMPION IRON and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAMPION IRON position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| CHAMPION IRON vs. Siemens Healthineers AG | CHAMPION IRON vs. RCI Hospitality Holdings | CHAMPION IRON vs. Planet Fitness | CHAMPION IRON vs. PULSION Medical Systems |
| LUMI GRUPPEN vs. CHAMPION IRON | LUMI GRUPPEN vs. MAG SILVER | LUMI GRUPPEN vs. De Grey Mining | LUMI GRUPPEN vs. RELIANCE STEEL AL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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