Correlation Between NYSE Composite and Lumia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lumia 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 NYSE Composite and Lumia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lumia, you can compare the effects of market volatilities on NYSE Composite and Lumia 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 NYSE Composite with a short position of Lumia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lumia.
Diversification Opportunities for NYSE Composite and Lumia
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Lumia is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lumia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumia and NYSE Composite 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 NYSE Composite are associated (or correlated) with Lumia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumia has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lumia go up and down completely randomly.
Pair Corralation between NYSE Composite and Lumia
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Lumia. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 284.58 times less risky than Lumia. The index trades about -0.21 of its potential returns per unit of risk. The Lumia is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Lumia on October 11, 2024 and sell it today you would earn a total of 120.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
NYSE Composite vs. Lumia
Performance |
| Timeline |
NYSE Composite and Lumia Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lumia
Pair trading matchups for Lumia
Pair Trading with NYSE Composite and Lumia
The main advantage of trading using opposite NYSE Composite and Lumia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lumia 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 Lumia will offset losses from the drop in Lumia's long position.| NYSE Composite vs. Femasys | NYSE Composite vs. Teradyne | NYSE Composite vs. Toro Co | NYSE Composite vs. Space Communication |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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