Correlation Between Fonar and LumiraDx

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

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

Diversification Opportunities for Fonar and LumiraDx

0.66

Correlation Coefficient

Fonar  LumiraDx

Poor diversification

The 3 months correlation between Fonar and LumiraDx is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and LumiraDx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LumiraDx and Fonar 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 Fonar are associated (or correlated) with LumiraDx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LumiraDx has no effect on the direction of Fonar i.e., Fonar and LumiraDx go up and down completely randomly.

Pair Corralation between Fonar and LumiraDx

If you would invest  1,549  in Fonar on August 31, 2024 and sell it today you would earn a total of  90.00  from holding Fonar or generate 5.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Fonar  vs.  LumiraDx

Fonar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fonar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

LumiraDx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LumiraDx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, LumiraDx is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fonar and LumiraDx

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

The idea behind Fonar and LumiraDx 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.