Correlation Between Xilam Animation and Lumibird

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

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

Diversification Opportunities for Xilam Animation and Lumibird

-0.22

Correlation Coefficient

Xilam Animation  Lumibird

Very good diversification

The 3 months correlation between Xilam and Lumibird is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xilam Animation and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Xilam Animation 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 Xilam Animation are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Xilam Animation i.e., Xilam Animation and Lumibird go up and down completely randomly.

Pair Corralation between Xilam Animation and Lumibird

Assuming the 90 days trading horizon Xilam Animation is expected to under-perform the Lumibird. In addition to that, Xilam Animation is 1.47 times more volatile than Lumibird SA. It trades about -0.17 of its total potential returns per unit of risk. Lumibird SA is currently generating about 0.07 per unit of volatility. If you would invest  936.00  in Lumibird SA on December 31, 2024 and sell it today you would earn a total of  109.00  from holding Lumibird SA or generate 11.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Xilam Animation  vs.  Lumibird SA

Xilam Animation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xilam Animation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lumibird SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lumibird SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Lumibird reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xilam Animation and Lumibird

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

The idea behind Xilam Animation and Lumibird SA 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.