Correlation Between Lumia and Coincheck Group

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

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

Diversification Opportunities for Lumia and Coincheck Group

0.41

Correlation Coefficient

Lumia  Coincheck Group

Very weak diversification

The 3 months correlation between Lumia and Coincheck is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Coincheck Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coincheck Group NV 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 Coincheck Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coincheck Group NV has no effect on the direction of Lumia i.e., Lumia and Coincheck Group go up and down completely randomly.

Pair Corralation between Lumia and Coincheck Group

Assuming the 90 days trading horizon Lumia is expected to under-perform the Coincheck Group. But the crypto coin apears to be less risky and, when comparing its historical volatility, Lumia is 2.44 times less risky than Coincheck Group. The crypto coin trades about -0.37 of its potential returns per unit of risk. The Coincheck Group NV is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Coincheck Group NV on October 12, 2024 and sell it today you would lose (136.00) from holding Coincheck Group NV or give up 44.59% of portfolio value over 90 days.

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

Lumia  vs.  Coincheck Group NV

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.

Coincheck Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coincheck Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Lumia and Coincheck Group

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

The idea behind Lumia and Coincheck Group NV 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.