Correlation Between Lumia and Lifestyle Global

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

By analyzing existing cross correlation between Lumia and Lifestyle Global Enterprise, you can compare the effects of market volatilities on Lumia and Lifestyle Global 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 Lifestyle Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Lifestyle Global.

Diversification Opportunities for Lumia and Lifestyle Global

-0.29

Correlation Coefficient

Lumia  Lifestyle Global

Very good diversification

The 3 months correlation between Lumia and Lifestyle is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Lifestyle Global Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Global Ent 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 Lifestyle Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Global Ent has no effect on the direction of Lumia i.e., Lumia and Lifestyle Global go up and down completely randomly.

Pair Corralation between Lumia and Lifestyle Global

Assuming the 90 days trading horizon Lumia is expected to under-perform the Lifestyle Global. In addition to that, Lumia is 10.21 times more volatile than Lifestyle Global Enterprise. It trades about -0.2 of its total potential returns per unit of risk. Lifestyle Global Enterprise is currently generating about -0.11 per unit of volatility. If you would invest  2,750  in Lifestyle Global Enterprise on December 24, 2024 and sell it today you would lose (120.00) from holding Lifestyle Global Enterprise or give up 4.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.5%
Values	Daily Returns

Lumia  vs.  Lifestyle Global Enterprise

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.

Lifestyle Global Ent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifestyle Global Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lifestyle Global is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lumia and Lifestyle Global

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

The idea behind Lumia and Lifestyle Global Enterprise 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.