Correlation Between Lumia and ZINZINO AB

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

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

Diversification Opportunities for Lumia and ZINZINO AB

-0.52

Correlation Coefficient

Lumia  ZINZINO AB

Excellent diversification

The 3 months correlation between Lumia and ZINZINO is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B 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 ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of Lumia i.e., Lumia and ZINZINO AB go up and down completely randomly.

Pair Corralation between Lumia and ZINZINO AB

Assuming the 90 days trading horizon Lumia is expected to generate 75.49 times more return on investment than ZINZINO AB. However, Lumia is 75.49 times more volatile than ZINZINO AB B. It trades about 0.21 of its potential returns per unit of risk. ZINZINO AB B is currently generating about 0.16 per unit of risk. If you would invest  0.00  in Lumia on October 9, 2024 and sell it today you would earn a total of  128.00  from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.95%
Values	Daily Returns

Lumia  vs.  ZINZINO AB B

Lumia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lumia are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Lumia exhibited solid returns over the last few months and may actually be approaching a breakup point.

ZINZINO AB B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZINZINO AB B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lumia and ZINZINO AB

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

The idea behind Lumia and ZINZINO AB B 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..