Correlation Between Lumia and SHBASS

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

By analyzing existing cross correlation between Lumia and SHBASS 365 10 JUN 25, you can compare the effects of market volatilities on Lumia and SHBASS 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 SHBASS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and SHBASS.

Diversification Opportunities for Lumia and SHBASS

0.3

Correlation Coefficient

Lumia  SHBASS

Weak diversification

The 3 months correlation between Lumia and SHBASS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and SHBASS 365 10 JUN 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHBASS 365 10 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 SHBASS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHBASS 365 10 has no effect on the direction of Lumia i.e., Lumia and SHBASS go up and down completely randomly.

Pair Corralation between Lumia and SHBASS

Assuming the 90 days trading horizon Lumia is expected to generate 118.1 times more return on investment than SHBASS. However, Lumia is 118.1 times more volatile than SHBASS 365 10 JUN 25. It trades about 0.12 of its potential returns per unit of risk. SHBASS 365 10 JUN 25 is currently generating about -0.11 per unit of risk. If you would invest  0.00  in Lumia on October 10, 2024 and sell it today you would earn a total of  128.00  from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.16%
Values	Daily Returns

Lumia  vs.  SHBASS 365 10 JUN 25

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.

SHBASS 365 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHBASS 365 10 JUN 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SHBASS 365 10 JUN 25 investors.

Pair Trading with Lumia and SHBASS

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

The idea behind Lumia and SHBASS 365 10 JUN 25 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.