Correlation Between Lumia and Shelton International

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

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

Diversification Opportunities for Lumia and Shelton International

0.0

Correlation Coefficient

Lumia  Shelton International

Pay attention - limited upside

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

Pair Corralation between Lumia and Shelton International

If you would invest (100.00) in Shelton International Select on October 27, 2024 and sell it today you would earn a total of  100.00  from holding Shelton International Select or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lumia  vs.  Shelton International Select

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.

Shelton International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shelton International Select has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Shelton International 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 Shelton International

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

The idea behind Lumia and Shelton International Select 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.