Correlation Between Lumen Technologies and U S Cellular

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

By analyzing existing cross correlation between Lumen Technologies and United States Cellular, you can compare the effects of market volatilities on Lumen Technologies and U S Cellular 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 Lumen Technologies with a short position of U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and U S Cellular.

Diversification Opportunities for Lumen Technologies and U S Cellular

-0.68

Correlation Coefficient

Lumen Technologies  U S Cellular

Excellent diversification

The 3 months correlation between Lumen and USM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular and Lumen Technologies 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 Lumen Technologies are associated (or correlated) with U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and U S Cellular go up and down completely randomly.

Pair Corralation between Lumen Technologies and U S Cellular

Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the U S Cellular. In addition to that, Lumen Technologies is 2.46 times more volatile than United States Cellular. It trades about -0.07 of its total potential returns per unit of risk. United States Cellular is currently generating about 0.08 per unit of volatility. If you would invest  6,120  in United States Cellular on December 19, 2024 and sell it today you would earn a total of  433.00  from holding United States Cellular or generate 7.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Lumen Technologies  vs.  United States Cellular

Lumen Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumen Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

United States Cellular

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, U S Cellular may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lumen Technologies and U S Cellular

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

The idea behind Lumen Technologies and United States Cellular 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 Commodity Directory module to find actively traded commodities issued by global exchanges.