Correlation Between Lumia and Pimco Flexible

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

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

Diversification Opportunities for Lumia and Pimco Flexible

0.57

Correlation Coefficient

Lumia  Pimco Flexible

Very weak diversification

The 3 months correlation between Lumia and Pimco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Pimco Flexible Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Flexible Credit 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 Pimco Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Flexible Credit has no effect on the direction of Lumia i.e., Lumia and Pimco Flexible go up and down completely randomly.

Pair Corralation between Lumia and Pimco Flexible

Assuming the 90 days trading horizon Lumia is expected to generate 553.49 times more return on investment than Pimco Flexible. However, Lumia is 553.49 times more volatile than Pimco Flexible Credit. It trades about 0.12 of its potential returns per unit of risk. Pimco Flexible Credit is currently generating about 0.07 per unit of risk. If you would invest  0.00  in Lumia on October 24, 2024 and sell it today you would earn a total of  101.00  from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Lumia  vs.  Pimco Flexible Credit

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.

Pimco Flexible Credit

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Flexible Credit are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Pimco Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lumia and Pimco Flexible

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

The idea behind Lumia and Pimco Flexible Credit 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..