Correlation Between Lumentum Holdings and Intel
Can any of the company-specific risk be diversified away by investing in both Lumentum Holdings and Intel 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 Lumentum Holdings and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumentum Holdings and Intel, you can compare the effects of market volatilities on Lumentum Holdings and Intel 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 Lumentum Holdings with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumentum Holdings and Intel.
Diversification Opportunities for Lumentum Holdings and Intel
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lumentum and Intel is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lumentum Holdings and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Lumentum Holdings 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 Lumentum Holdings are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Lumentum Holdings i.e., Lumentum Holdings and Intel go up and down completely randomly.
Pair Corralation between Lumentum Holdings and Intel
Given the investment horizon of 90 days Lumentum Holdings is expected to generate 0.72 times more return on investment than Intel. However, Lumentum Holdings is 1.4 times less risky than Intel. It trades about 0.29 of its potential returns per unit of risk. Intel is currently generating about 0.11 per unit of risk. If you would invest 7,837 in Lumentum Holdings on May 27, 2025 and sell it today you would earn a total of 4,097 from holding Lumentum Holdings or generate 52.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumentum Holdings vs. Intel
Performance |
| Timeline |
| Lumentum Holdings |
| Intel |
Lumentum Holdings and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumentum Holdings and Intel
The main advantage of trading using opposite Lumentum Holdings and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumentum Holdings position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Lumentum Holdings vs. Viavi Solutions | Lumentum Holdings vs. Ciena Corp | Lumentum Holdings vs. Applied Opt | Lumentum Holdings vs. Qorvo Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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