Correlation Between Luminar Technologies and Affiliated Resources

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

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

Diversification Opportunities for Luminar Technologies and Affiliated Resources

0.52

Correlation Coefficient

Luminar Technologies  Affiliated Resources

Very weak diversification

The 3 months correlation between Luminar and Affiliated is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp and Luminar 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 Luminar Technologies are associated (or correlated) with Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Affiliated Resources go up and down completely randomly.

Pair Corralation between Luminar Technologies and Affiliated Resources

Given the investment horizon of 90 days Luminar Technologies is expected to generate 0.54 times more return on investment than Affiliated Resources. However, Luminar Technologies is 1.84 times less risky than Affiliated Resources. It trades about 0.14 of its potential returns per unit of risk. Affiliated Resources Corp is currently generating about 0.02 per unit of risk. If you would invest  518.00  in Luminar Technologies on October 25, 2024 and sell it today you would earn a total of  104.50  from holding Luminar Technologies or generate 20.17% return on investment over 90 days.

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

Luminar Technologies  vs.  Affiliated Resources Corp

Luminar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Luminar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Affiliated Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affiliated Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite fragile technical and fundamental indicators, Affiliated Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Luminar Technologies and Affiliated Resources

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

The idea behind Luminar Technologies and Affiliated Resources Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.