Correlation Between Lumia and Fidelity Sai

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

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

Diversification Opportunities for Lumia and Fidelity Sai

-0.62

Correlation Coefficient

Lumia  Fidelity Sai

Excellent diversification

The 3 months correlation between Lumia and Fidelity is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Fidelity Sai Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Long 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 Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Long has no effect on the direction of Lumia i.e., Lumia and Fidelity Sai go up and down completely randomly.

Pair Corralation between Lumia and Fidelity Sai

Assuming the 90 days trading horizon Lumia is expected to generate 43.8 times more return on investment than Fidelity Sai. However, Lumia is 43.8 times more volatile than Fidelity Sai Long Term. It trades about 0.04 of its potential returns per unit of risk. Fidelity Sai Long Term is currently generating about -0.02 per unit of risk. If you would invest  0.00  in Lumia on October 11, 2024 and sell it today you would earn a total of  120.00  from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.68%
Values	Daily Returns

Lumia  vs.  Fidelity Sai Long Term

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.

Fidelity Sai Long

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai Long Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Lumia and Fidelity Sai

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

The idea behind Lumia and Fidelity Sai Long Term 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.