Correlation Between Northann Corp and Lumen Technologies
Can any of the company-specific risk be diversified away by investing in both Northann Corp and Lumen Technologies 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 Northann Corp and Lumen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and Lumen Technologies, you can compare the effects of market volatilities on Northann Corp and Lumen Technologies 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 Northann Corp with a short position of Lumen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and Lumen Technologies.
Diversification Opportunities for Northann Corp and Lumen Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northann and Lumen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and Lumen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies and Northann Corp 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 Northann Corp are associated (or correlated) with Lumen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies has no effect on the direction of Northann Corp i.e., Northann Corp and Lumen Technologies go up and down completely randomly.
Pair Corralation between Northann Corp and Lumen Technologies
Considering the 90-day investment horizon Northann Corp is expected to generate 2.68 times more return on investment than Lumen Technologies. However, Northann Corp is 2.68 times more volatile than Lumen Technologies. It trades about 0.15 of its potential returns per unit of risk. Lumen Technologies is currently generating about 0.14 per unit of risk. If you would invest 19.00 in Northann Corp on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Northann Corp or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northann Corp vs. Lumen Technologies
Performance |
| Timeline |
| Northann Corp |
| Lumen Technologies |
Northann Corp and Lumen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and Lumen Technologies
The main advantage of trading using opposite Northann Corp and Lumen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp position performs unexpectedly, Lumen Technologies 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 Lumen Technologies will offset losses from the drop in Lumen Technologies' long position.| Northann Corp vs. La Z Boy Incorporated | Northann Corp vs. Natuzzi SpA | Northann Corp vs. Mohawk Industries | Northann Corp vs. MasterBrand |
| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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