Correlation Between Plurilock Security and Lumine

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

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

Diversification Opportunities for Plurilock Security and Lumine

-0.86

Correlation Coefficient

Plurilock Security  Lumine

Pay attention - limited upside

The 3 months correlation between Plurilock and Lumine is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Plurilock Security and Lumine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumine Group and Plurilock Security 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 Plurilock Security are associated (or correlated) with Lumine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumine Group has no effect on the direction of Plurilock Security i.e., Plurilock Security and Lumine go up and down completely randomly.

Pair Corralation between Plurilock Security and Lumine

Assuming the 90 days trading horizon Plurilock Security is expected to under-perform the Lumine. In addition to that, Plurilock Security is 2.23 times more volatile than Lumine Group. It trades about -0.02 of its total potential returns per unit of risk. Lumine Group is currently generating about 0.22 per unit of volatility. If you would invest  3,242  in Lumine Group on October 1, 2024 and sell it today you would earn a total of  874.00  from holding Lumine Group or generate 26.96% return on investment over 90 days.

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

Plurilock Security  vs.  Lumine Group

Plurilock Security

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plurilock Security 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 basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Lumine Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lumine Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lumine showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plurilock Security and Lumine

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

The idea behind Plurilock Security and Lumine Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.