Correlation Between BSQUARE and Lumine

Can any of the company-specific risk be diversified away by investing in both BSQUARE and Lumine 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 BSQUARE and Lumine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BSQUARE and Lumine Group, you can compare the effects of market volatilities on BSQUARE and Lumine 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 BSQUARE with a short position of Lumine. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSQUARE and Lumine.

Diversification Opportunities for BSQUARE and Lumine

0.0

Correlation Coefficient

BSQUARE  Lumine

Pay attention - limited upside

The 3 months correlation between BSQUARE and Lumine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BSQUARE and Lumine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumine Group and BSQUARE 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 BSQUARE are associated (or correlated) with Lumine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumine Group has no effect on the direction of BSQUARE i.e., BSQUARE and Lumine go up and down completely randomly.

Pair Corralation between BSQUARE and Lumine

If you would invest  122.00  in BSQUARE on October 9, 2024 and sell it today you would earn a total of  0.00  from holding BSQUARE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

BSQUARE  vs.  Lumine Group

BSQUARE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSQUARE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BSQUARE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Lumine Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lumine Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Lumine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BSQUARE and Lumine

The main advantage of trading using opposite BSQUARE and Lumine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSQUARE position performs unexpectedly, Lumine 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 Lumine will offset losses from the drop in Lumine's long position.

The idea behind BSQUARE and Lumine Group 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.