Correlation Between Lumia and Ouster, Warrants

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

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

Diversification Opportunities for Lumia and Ouster, Warrants

-0.53

Correlation Coefficient

Lumia  Ouster, Warrants

Excellent diversification

The 3 months correlation between Lumia and Ouster, is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Ouster, Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster, Warrants 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 Ouster, Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster, Warrants has no effect on the direction of Lumia i.e., Lumia and Ouster, Warrants go up and down completely randomly.

Pair Corralation between Lumia and Ouster, Warrants

Assuming the 90 days trading horizon Lumia is expected to generate 1.11 times less return on investment than Ouster, Warrants. In addition to that, Lumia is 5.48 times more volatile than Ouster, Warrants. It trades about 0.07 of its total potential returns per unit of risk. Ouster, Warrants is currently generating about 0.45 per unit of volatility. If you would invest  8.99  in Ouster, Warrants on October 9, 2024 and sell it today you would earn a total of  8.01  from holding Ouster, Warrants or generate 89.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	7.02%
Values	Daily Returns

Lumia  vs.  Ouster, 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.

Ouster, Warrants

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster, Warrants are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ouster, Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lumia and Ouster, Warrants

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

The idea behind Lumia and Ouster, 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.