Correlation Between Lumia and Compania Minera

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

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

Diversification Opportunities for Lumia and Compania Minera

-0.15

Correlation Coefficient

Lumia  Compania Minera

Good diversification

The 3 months correlation between Lumia and Compania is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Compania Minera Poderosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Minera Poderosa 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 Compania Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Minera Poderosa has no effect on the direction of Lumia i.e., Lumia and Compania Minera go up and down completely randomly.

Pair Corralation between Lumia and Compania Minera

Assuming the 90 days trading horizon Lumia is expected to under-perform the Compania Minera. In addition to that, Lumia is 3.65 times more volatile than Compania Minera Poderosa. It trades about -0.2 of its total potential returns per unit of risk. Compania Minera Poderosa is currently generating about 0.15 per unit of volatility. If you would invest  800.00  in Compania Minera Poderosa on December 24, 2024 and sell it today you would earn a total of  148.00  from holding Compania Minera Poderosa or generate 18.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Lumia  vs.  Compania Minera Poderosa

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 unsteady 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.

Compania Minera Poderosa

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compania Minera Poderosa are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Compania Minera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lumia and Compania Minera

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

The idea behind Lumia and Compania Minera Poderosa 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.