Correlation Between Lumen Technologies, and TIM SA

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

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

Diversification Opportunities for Lumen Technologies, and TIM SA

-0.8

Correlation Coefficient

Lumen Technologies,  TIM SA

Pay attention - limited upside

The 3 months correlation between Lumen and TIM is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies, and TIM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM SA and Lumen Technologies, 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 Lumen Technologies, are associated (or correlated) with TIM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM SA has no effect on the direction of Lumen Technologies, i.e., Lumen Technologies, and TIM SA go up and down completely randomly.

Pair Corralation between Lumen Technologies, and TIM SA

Assuming the 90 days trading horizon Lumen Technologies, is expected to under-perform the TIM SA. In addition to that, Lumen Technologies, is 2.34 times more volatile than TIM SA. It trades about -0.07 of its total potential returns per unit of risk. TIM SA is currently generating about 0.14 per unit of volatility. If you would invest  1,483  in TIM SA on December 23, 2024 and sell it today you would earn a total of  253.00  from holding TIM SA or generate 17.06% return on investment over 90 days.

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

Lumen Technologies,  vs.  TIM SA

Lumen Technologies,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumen Technologies, 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 primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TIM SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TIM SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TIM SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lumen Technologies, and TIM SA

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

The idea behind Lumen Technologies, and TIM 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.