Correlation Between Huntington Ingalls and Lumen Technologies,

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

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

Diversification Opportunities for Huntington Ingalls and Lumen Technologies,

-0.49

Correlation Coefficient

Huntington Ingalls  Lumen Technologies,

Very good diversification

The 3 months correlation between Huntington and Lumen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries, and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, and Huntington Ingalls 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 Huntington Ingalls Industries, 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 Huntington Ingalls i.e., Huntington Ingalls and Lumen Technologies, go up and down completely randomly.

Pair Corralation between Huntington Ingalls and Lumen Technologies,

Assuming the 90 days trading horizon Huntington Ingalls Industries, is expected to generate 0.51 times more return on investment than Lumen Technologies,. However, Huntington Ingalls Industries, is 1.95 times less risky than Lumen Technologies,. It trades about 0.03 of its potential returns per unit of risk. Lumen Technologies, is currently generating about -0.16 per unit of risk. If you would invest  1,509  in Huntington Ingalls Industries, on October 7, 2024 and sell it today you would earn a total of  21.00  from holding Huntington Ingalls Industries, or generate 1.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Huntington Ingalls Industries,  vs.  Lumen Technologies,

Huntington Ingalls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huntington Ingalls Industries, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lumen Technologies,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lumen Technologies, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Lumen Technologies, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Huntington Ingalls and Lumen Technologies,

The main advantage of trading using opposite Huntington Ingalls and Lumen Technologies, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls 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,'s long position.

The idea behind Huntington Ingalls Industries, and Lumen Technologies, 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.