Correlation Between Lumine and BSQUARE

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

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

Diversification Opportunities for Lumine and BSQUARE

0.0

Correlation Coefficient

Lumine  BSQUARE

Pay attention - limited upside

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

Pair Corralation between Lumine and BSQUARE

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

Lumine Group  vs.  BSQUARE

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.

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.

Pair Trading with Lumine and BSQUARE

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

The idea behind Lumine Group and BSQUARE 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.