Correlation Between LUX ISLAND and CIM FINANCIAL
Can any of the company-specific risk be diversified away by investing in both LUX ISLAND and CIM FINANCIAL 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 LUX ISLAND and CIM FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUX ISLAND RESORTS and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on LUX ISLAND and CIM FINANCIAL 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 LUX ISLAND with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUX ISLAND and CIM FINANCIAL.
Diversification Opportunities for LUX ISLAND and CIM FINANCIAL
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between LUX and CIM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding LUX ISLAND RESORTS and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and LUX ISLAND 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 LUX ISLAND RESORTS are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of LUX ISLAND i.e., LUX ISLAND and CIM FINANCIAL go up and down completely randomly.
Pair Corralation between LUX ISLAND and CIM FINANCIAL
Assuming the 90 days trading horizon LUX ISLAND RESORTS is expected to under-perform the CIM FINANCIAL. But the stock apears to be less risky and, when comparing its historical volatility, LUX ISLAND RESORTS is 2.07 times less risky than CIM FINANCIAL. The stock trades about -0.13 of its potential returns per unit of risk. The CIM FINANCIAL SERVICES is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,440 in CIM FINANCIAL SERVICES on December 3, 2024 and sell it today you would earn a total of 210.00 from holding CIM FINANCIAL SERVICES or generate 14.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
LUX ISLAND RESORTS vs. CIM FINANCIAL SERVICES
Performance |
Timeline |
LUX ISLAND RESORTS |
CIM FINANCIAL SERVICES |
LUX ISLAND and CIM FINANCIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LUX ISLAND and CIM FINANCIAL
The main advantage of trading using opposite LUX ISLAND and CIM FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUX ISLAND position performs unexpectedly, CIM FINANCIAL 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 CIM FINANCIAL will offset losses from the drop in CIM FINANCIAL's long position.LUX ISLAND vs. AGAPE GLOBAL INVESTMENTS | LUX ISLAND vs. CAVELL TOURISTIC INVESTMENTS | LUX ISLAND vs. QUALITY BEVERAGES LTD | LUX ISLAND vs. BAYPORT MANAGEMENT LTD |
CIM FINANCIAL vs. LOTTOTECH LTD | CIM FINANCIAL vs. CONSTANCE HOTELS SERVICES | CIM FINANCIAL vs. PHOENIX INVESTMENT PANY | CIM FINANCIAL vs. PHOENIX BEVERAGES LTD |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |