Correlation Between Lumia and Affinity

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

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

Diversification Opportunities for Lumia and Affinity

-0.49

Correlation Coefficient

Lumia  Affinity

Very good diversification

The 3 months correlation between Lumia and Affinity is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Affinity Ci Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Ci Growth and Lumia 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 Lumia are associated (or correlated) with Affinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Ci Growth has no effect on the direction of Lumia i.e., Lumia and Affinity go up and down completely randomly.

Pair Corralation between Lumia and Affinity

Assuming the 90 days trading horizon Lumia is expected to under-perform the Affinity. In addition to that, Lumia is 13.87 times more volatile than Affinity Ci Growth. It trades about -0.18 of its total potential returns per unit of risk. Affinity Ci Growth is currently generating about 0.0 per unit of volatility. If you would invest  135.00  in Affinity Ci Growth on December 25, 2024 and sell it today you would earn a total of  0.00  from holding Affinity Ci Growth or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Lumia  vs.  Affinity Ci Growth

Lumia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Lumia shareholders.

Affinity Ci Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Affinity Ci Growth has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Affinity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lumia and Affinity

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

The idea behind Lumia and Affinity Ci Growth 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.