Correlation Between Lumentum Holdings and Telesat Corp
Can any of the company-specific risk be diversified away by investing in both Lumentum Holdings and Telesat Corp 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 Lumentum Holdings and Telesat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumentum Holdings and Telesat Corp, you can compare the effects of market volatilities on Lumentum Holdings and Telesat Corp 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 Lumentum Holdings with a short position of Telesat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumentum Holdings and Telesat Corp.
Diversification Opportunities for Lumentum Holdings and Telesat Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lumentum and Telesat is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lumentum Holdings and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and Lumentum Holdings 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 Lumentum Holdings are associated (or correlated) with Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of Lumentum Holdings i.e., Lumentum Holdings and Telesat Corp go up and down completely randomly.
Pair Corralation between Lumentum Holdings and Telesat Corp
Given the investment horizon of 90 days Lumentum Holdings is expected to under-perform the Telesat Corp. But the stock apears to be less risky and, when comparing its historical volatility, Lumentum Holdings is 1.15 times less risky than Telesat Corp. The stock trades about -0.07 of its potential returns per unit of risk. The Telesat Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,633 in Telesat Corp on December 30, 2024 and sell it today you would earn a total of 275.00 from holding Telesat Corp or generate 16.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lumentum Holdings vs. Telesat Corp
Performance |
Timeline |
Lumentum Holdings |
Telesat Corp |
Lumentum Holdings and Telesat Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lumentum Holdings and Telesat Corp
The main advantage of trading using opposite Lumentum Holdings and Telesat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumentum Holdings position performs unexpectedly, Telesat Corp 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 Telesat Corp will offset losses from the drop in Telesat Corp's long position.Lumentum Holdings vs. NETGEAR | Lumentum Holdings vs. KVH Industries | Lumentum Holdings vs. Telesat Corp | Lumentum Holdings vs. Juniper Networks |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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