Correlation Between Lumia and Firstwave Cloud

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

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

Diversification Opportunities for Lumia and Firstwave Cloud

0.18

Correlation Coefficient

Lumia  Firstwave Cloud

Average diversification

The 3 months correlation between Lumia and Firstwave is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Firstwave Cloud Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firstwave Cloud Tech 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 Firstwave Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firstwave Cloud Tech has no effect on the direction of Lumia i.e., Lumia and Firstwave Cloud go up and down completely randomly.

Pair Corralation between Lumia and Firstwave Cloud

Assuming the 90 days trading horizon Lumia is expected to under-perform the Firstwave Cloud. In addition to that, Lumia is 1.2 times more volatile than Firstwave Cloud Technology. It trades about -0.18 of its total potential returns per unit of risk. Firstwave Cloud Technology is currently generating about -0.08 per unit of volatility. If you would invest  2.30  in Firstwave Cloud Technology on December 23, 2024 and sell it today you would lose (0.80) from holding Firstwave Cloud Technology or give up 34.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Lumia  vs.  Firstwave Cloud Technology

Lumia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumia 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 Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Lumia shareholders.

Firstwave Cloud Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firstwave Cloud Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lumia and Firstwave Cloud

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

The idea behind Lumia and Firstwave Cloud Technology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.