Correlation Between Figeac Aero and Lumibird

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

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

Diversification Opportunities for Figeac Aero and Lumibird

0.02

Correlation Coefficient

Figeac Aero  Lumibird

Significant diversification

The 3 months correlation between Figeac and Lumibird is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Figeac Aero SA and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Figeac Aero 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 Figeac Aero SA are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Figeac Aero i.e., Figeac Aero and Lumibird go up and down completely randomly.

Pair Corralation between Figeac Aero and Lumibird

Assuming the 90 days trading horizon Figeac Aero SA is expected to generate 0.33 times more return on investment than Lumibird. However, Figeac Aero SA is 3.06 times less risky than Lumibird. It trades about 0.01 of its potential returns per unit of risk. Lumibird SA is currently generating about -0.03 per unit of risk. If you would invest  582.00  in Figeac Aero SA on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Figeac Aero SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Figeac Aero SA  vs.  Lumibird SA

Figeac Aero SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Figeac Aero SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Figeac Aero is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lumibird SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lumibird SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Figeac Aero and Lumibird

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

The idea behind Figeac Aero SA and Lumibird SA 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.