Correlation Between Lumentum Holdings and Minim

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

By analyzing existing cross correlation between Lumentum Holdings and Minim Inc, you can compare the effects of market volatilities on Lumentum Holdings and Minim 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 Minim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumentum Holdings and Minim.

Diversification Opportunities for Lumentum Holdings and Minim

0.83

Correlation Coefficient

Lumentum Holdings  Minim

Very poor diversification

The 3 months correlation between Lumentum and Minim is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lumentum Holdings and Minim Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minim Inc 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 Minim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minim Inc has no effect on the direction of Lumentum Holdings i.e., Lumentum Holdings and Minim go up and down completely randomly.

Pair Corralation between Lumentum Holdings and Minim

Given the investment horizon of 90 days Lumentum Holdings is expected to generate 4.97 times less return on investment than Minim. But when comparing it to its historical volatility, Lumentum Holdings is 9.79 times less risky than Minim. It trades about 0.34 of its potential returns per unit of risk. Minim Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Minim Inc on May 5, 2025 and sell it today you would earn a total of  221.00  from holding Minim Inc or generate 200.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	73.02%
Values	Daily Returns

Lumentum Holdings  vs.  Minim Inc

Lumentum Holdings

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Lumentum Holdings are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Lumentum Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Minim Inc

Risk-Adjusted Performance

Good

Over the last 90 days Minim Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very uncertain basic indicators, Minim displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lumentum Holdings and Minim

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

The idea behind Lumentum Holdings and Minim 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.