Correlation Between Lumine and Amotiv
Can any of the company-specific risk be diversified away by investing in both Lumine and Amotiv 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 Amotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumine Group and Amotiv Limited, you can compare the effects of market volatilities on Lumine and Amotiv 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 Amotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumine and Amotiv.
Diversification Opportunities for Lumine and Amotiv
Pay attention - limited upside
The 3 months correlation between Lumine and Amotiv is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lumine Group and Amotiv Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amotiv Limited 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 Amotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amotiv Limited has no effect on the direction of Lumine i.e., Lumine and Amotiv go up and down completely randomly.
Pair Corralation between Lumine and Amotiv
Assuming the 90 days horizon Lumine Group is expected to generate 1.43 times more return on investment than Amotiv. However, Lumine is 1.43 times more volatile than Amotiv Limited. It trades about 0.13 of its potential returns per unit of risk. Amotiv Limited is currently generating about 0.01 per unit of risk. If you would invest 3,226 in Lumine Group on October 26, 2024 and sell it today you would earn a total of 674.00 from holding Lumine Group or generate 20.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lumine Group vs. Amotiv Limited
Performance |
Timeline |
Lumine Group |
Amotiv Limited |
Lumine and Amotiv Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lumine and Amotiv
The main advantage of trading using opposite Lumine and Amotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumine position performs unexpectedly, Amotiv 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 Amotiv will offset losses from the drop in Amotiv's long position.Lumine vs. Topicus | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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