Correlation Between Lumia and Embark Technology

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

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

Diversification Opportunities for Lumia and Embark Technology

-0.74

Correlation Coefficient

Lumia  Embark Technology

Pay attention - limited upside

The 3 months correlation between Lumia and Embark is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Embark Technology Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Technology 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 Embark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Technology has no effect on the direction of Lumia i.e., Lumia and Embark Technology go up and down completely randomly.

Pair Corralation between Lumia and Embark Technology

If you would invest  1.52  in Embark Technology Warrants on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Embark Technology Warrants or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Lumia  vs.  Embark Technology Warrants

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.

Embark Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embark Technology Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Embark Technology 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 Embark Technology

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

The idea behind Lumia and Embark Technology Warrants 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.