Correlation Between Corning Incorporated and LightPath Technologies

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

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

Diversification Opportunities for Corning Incorporated and LightPath Technologies

0.26

Correlation Coefficient

Corning Incorporated  LightPath Technologies

Modest diversification

The 3 months correlation between Corning and LightPath is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and LightPath Technologies go up and down completely randomly.

Pair Corralation between Corning Incorporated and LightPath Technologies

Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.43 times more return on investment than LightPath Technologies. However, Corning Incorporated is 2.35 times less risky than LightPath Technologies. It trades about 0.0 of its potential returns per unit of risk. LightPath Technologies is currently generating about -0.16 per unit of risk. If you would invest  4,707  in Corning Incorporated on December 29, 2024 and sell it today you would lose (51.00) from holding Corning Incorporated or give up 1.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Corning Incorporated  vs.  LightPath Technologies

Corning Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corning Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

LightPath Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days LightPath Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Corning Incorporated and LightPath Technologies

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

The idea behind Corning Incorporated and LightPath Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.