Correlation Between Joint Stock and Lumentum Holdings
Can any of the company-specific risk be diversified away by investing in both Joint Stock and Lumentum Holdings 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 Joint Stock and Lumentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and Lumentum Holdings, you can compare the effects of market volatilities on Joint Stock and Lumentum Holdings 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 Joint Stock with a short position of Lumentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and Lumentum Holdings.
Diversification Opportunities for Joint Stock and Lumentum Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Joint and Lumentum is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and Lumentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumentum Holdings and Joint Stock 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 Joint Stock are associated (or correlated) with Lumentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumentum Holdings has no effect on the direction of Joint Stock i.e., Joint Stock and Lumentum Holdings go up and down completely randomly.
Pair Corralation between Joint Stock and Lumentum Holdings
Given the investment horizon of 90 days Joint Stock is expected to under-perform the Lumentum Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Joint Stock is 3.29 times less risky than Lumentum Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Lumentum Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 14,191 in Lumentum Holdings on September 4, 2025 and sell it today you would earn a total of 16,107 from holding Lumentum Holdings or generate 113.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joint Stock vs. Lumentum Holdings
Performance |
| Timeline |
| Joint Stock |
| Lumentum Holdings |
Joint Stock and Lumentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and Lumentum Holdings
The main advantage of trading using opposite Joint Stock and Lumentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock position performs unexpectedly, Lumentum Holdings 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 Lumentum Holdings will offset losses from the drop in Lumentum Holdings' long position.| Joint Stock vs. Straits Trading | Joint Stock vs. Apartment Investment and | Joint Stock vs. Equal Trading | Joint Stock vs. Ping An Insurance |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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