Correlation Between UDR and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both UDR 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 UDR and LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and LUMI GRUPPEN AS, you can compare the effects of market volatilities on UDR 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 UDR with a short position of LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and LUMI GRUPPEN.
Diversification Opportunities for UDR and LUMI GRUPPEN
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UDR and LUMI is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc 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 UDR 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 UDR Inc 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 UDR i.e., UDR and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between UDR and LUMI GRUPPEN
If you would invest 100.00 in LUMI GRUPPEN AS on October 12, 2024 and sell it today you would earn a total of 11.00 from holding LUMI GRUPPEN AS or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.88% |
| Values | Daily Returns |
UDR Inc vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| UDR Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LUMI GRUPPEN AS |
UDR and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and LUMI GRUPPEN
The main advantage of trading using opposite UDR and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR 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.The idea behind UDR Inc and LUMI GRUPPEN AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LUMI GRUPPEN vs. TT Electronics PLC | LUMI GRUPPEN vs. Penta Ocean Construction Co | LUMI GRUPPEN vs. Meiko Electronics Co | LUMI GRUPPEN vs. Daito Trust Construction |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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