Correlation Between Lumen Technologies and EBay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and EBay 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 Lumen Technologies and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and EBay Inc, you can compare the effects of market volatilities on Lumen Technologies and EBay 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 Lumen Technologies with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and EBay.

Diversification Opportunities for Lumen Technologies and EBay

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Lumen and EBay is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and EBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc and Lumen Technologies 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 Lumen Technologies are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and EBay go up and down completely randomly.

Pair Corralation between Lumen Technologies and EBay

Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the EBay. But the stock apears to be less risky and, when comparing its historical volatility, Lumen Technologies is 1.25 times less risky than EBay. The stock trades about -0.13 of its potential returns per unit of risk. The EBay Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,987  in EBay Inc on September 5, 2022 and sell it today you would earn a total of  533.00  from holding EBay Inc or generate 13.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lumen Technologies  vs.  EBay Inc

 Performance (%) 
       Timeline  
Lumen Technologies 
Lumen Performance
0 of 100
Over the last 90 days Lumen Technologies 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 primary indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Lumen Price Channel

EBay Inc 
EBay Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in EBay Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, EBay may actually be approaching a critical reversion point that can send shares even higher in January 2023.

EBay Price Channel

Lumen Technologies and EBay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lumen Technologies and EBay

The main advantage of trading using opposite Lumen Technologies and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
Lumen Technologies vs. America Movil SAB
Lumen Technologies vs. Anterix
Lumen Technologies vs. Gogo Inc
The idea behind Lumen Technologies and EBay Inc 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.
EBay vs. Carvana Co
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go