Correlation Between Lumia and Cass Saddle
Can any of the company-specific risk be diversified away by investing in both Lumia and Cass Saddle 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 Cass Saddle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Cass Saddle Agriculture, you can compare the effects of market volatilities on Lumia and Cass Saddle 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 Cass Saddle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Cass Saddle.
Diversification Opportunities for Lumia and Cass Saddle
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lumia and Cass is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Cass Saddle Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Saddle Agriculture 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 Cass Saddle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Saddle Agriculture has no effect on the direction of Lumia i.e., Lumia and Cass Saddle go up and down completely randomly.
Pair Corralation between Lumia and Cass Saddle
Assuming the 90 days trading horizon Lumia is expected to generate 6.62 times more return on investment than Cass Saddle. However, Lumia is 6.62 times more volatile than Cass Saddle Agriculture. It trades about 0.04 of its potential returns per unit of risk. Cass Saddle Agriculture is currently generating about 0.1 per unit of risk. If you would invest 0.00 in Lumia on October 12, 2024 and sell it today you would earn a total of 117.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 75.78% |
Values | Daily Returns |
Lumia vs. Cass Saddle Agriculture
Performance |
Timeline |
Lumia |
Cass Saddle Agriculture |
Lumia and Cass Saddle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lumia and Cass Saddle
The main advantage of trading using opposite Lumia and Cass Saddle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Cass Saddle 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 Cass Saddle will offset losses from the drop in Cass Saddle's long position.The idea behind Lumia and Cass Saddle Agriculture 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.Cass Saddle vs. BRITISH AMERICAN TOBACCO | Cass Saddle vs. TANGANDA TEA PANY | Cass Saddle vs. ZB FINANCIAL HOLDINGS | Cass Saddle vs. Morgan Co Multi |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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