Correlation Between Lumia and Rabbit Holdings

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

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

Diversification Opportunities for Lumia and Rabbit Holdings

0.0

Correlation Coefficient

Lumia  Rabbit Holdings

Pay attention - limited upside

The 3 months correlation between Lumia and Rabbit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Rabbit Holdings PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rabbit Holdings PCL 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 Rabbit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rabbit Holdings PCL has no effect on the direction of Lumia i.e., Lumia and Rabbit Holdings go up and down completely randomly.

Pair Corralation between Lumia and Rabbit Holdings

Assuming the 90 days trading horizon Lumia is expected to under-perform the Rabbit Holdings. In addition to that, Lumia is 2.63 times more volatile than Rabbit Holdings PCL. It trades about -0.18 of its total potential returns per unit of risk. Rabbit Holdings PCL is currently generating about -0.13 per unit of volatility. If you would invest  43.00  in Rabbit Holdings PCL on December 23, 2024 and sell it today you would lose (10.00) from holding Rabbit Holdings PCL or give up 23.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Lumia  vs.  Rabbit Holdings PCL

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.

Rabbit Holdings PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rabbit Holdings PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lumia and Rabbit Holdings

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

The idea behind Lumia and Rabbit Holdings PCL 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.