Correlation Between Lumia and 26441CBH7

Can any of the company-specific risk be diversified away by investing in both Lumia and 26441CBH7 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 26441CBH7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lumia and DUKE ENERGY P, you can compare the effects of market volatilities on Lumia and 26441CBH7 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 26441CBH7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and 26441CBH7.

Diversification Opportunities for Lumia and 26441CBH7

-0.11

Correlation Coefficient

Lumia  26441CBH7

Good diversification

The 3 months correlation between Lumia and 26441CBH7 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and DUKE ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY P 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 26441CBH7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY P has no effect on the direction of Lumia i.e., Lumia and 26441CBH7 go up and down completely randomly.

Pair Corralation between Lumia and 26441CBH7

Assuming the 90 days trading horizon Lumia is expected to under-perform the 26441CBH7. In addition to that, Lumia is 14.38 times more volatile than DUKE ENERGY P. It trades about -0.18 of its total potential returns per unit of risk. DUKE ENERGY P is currently generating about -0.07 per unit of volatility. If you would invest  8,769  in DUKE ENERGY P on December 26, 2024 and sell it today you would lose (202.00) from holding DUKE ENERGY P or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Lumia  vs.  DUKE ENERGY P

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.

DUKE ENERGY P

Risk-Adjusted Performance

Very Weak

Over the last 90 days DUKE ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26441CBH7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lumia and 26441CBH7

The main advantage of trading using opposite Lumia and 26441CBH7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, 26441CBH7 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 26441CBH7 will offset losses from the drop in 26441CBH7's long position.

The idea behind Lumia and DUKE ENERGY P 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.