Correlation Between Telefnica and Lumen Technologies,

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

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

Diversification Opportunities for Telefnica and Lumen Technologies,

-0.32

Correlation Coefficient

Telefnica  Lumen Technologies,

Very good diversification

The 3 months correlation between Telefnica and Lumen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Telefnica SA and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, and Telefnica 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 Telefnica SA are associated (or correlated) with Lumen Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies, has no effect on the direction of Telefnica i.e., Telefnica and Lumen Technologies, go up and down completely randomly.

Pair Corralation between Telefnica and Lumen Technologies,

Assuming the 90 days trading horizon Telefnica SA is expected to under-perform the Lumen Technologies,. But the stock apears to be less risky and, when comparing its historical volatility, Telefnica SA is 2.33 times less risky than Lumen Technologies,. The stock trades about 0.0 of its potential returns per unit of risk. The Lumen Technologies, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,444  in Lumen Technologies, on October 7, 2024 and sell it today you would earn a total of  15.00  from holding Lumen Technologies, or generate 0.44% return on investment over 90 days.

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

Telefnica SA  vs.  Lumen Technologies,

Telefnica SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lumen Technologies,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lumen Technologies, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Lumen Technologies, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Telefnica and Lumen Technologies,

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

The idea behind Telefnica SA and Lumen Technologies, 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.