Correlation Between Lumia and Foncire 7

Can any of the company-specific risk be diversified away by investing in both Lumia and Foncire 7 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 Foncire 7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lumia and Foncire 7 investissement, you can compare the effects of market volatilities on Lumia and Foncire 7 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 Foncire 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Foncire 7.

Diversification Opportunities for Lumia and Foncire 7

-0.45

Correlation Coefficient

Lumia  Foncire 7

Very good diversification

The 3 months correlation between Lumia and Foncire is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Foncire 7 investissement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foncire 7 investissement 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 Foncire 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foncire 7 investissement has no effect on the direction of Lumia i.e., Lumia and Foncire 7 go up and down completely randomly.

Pair Corralation between Lumia and Foncire 7

Assuming the 90 days trading horizon Lumia is expected to generate 57.22 times more return on investment than Foncire 7. However, Lumia is 57.22 times more volatile than Foncire 7 investissement. It trades about 0.21 of its potential returns per unit of risk. Foncire 7 investissement is currently generating about -0.23 per unit of risk. If you would invest  0.00  in Lumia on October 10, 2024 and sell it today you would earn a total of  128.00  from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Lumia  vs.  Foncire 7 investissement

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.

Foncire 7 investissement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foncire 7 investissement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lumia and Foncire 7

The main advantage of trading using opposite Lumia and Foncire 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Foncire 7 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 Foncire 7 will offset losses from the drop in Foncire 7's long position.

The idea behind Lumia and Foncire 7 investissement 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.