Correlation Between Luminar Technologies and Holley
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Holley 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 Holley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Holley Inc, you can compare the effects of market volatilities on Luminar Technologies and Holley 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 Holley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Holley.
Diversification Opportunities for Luminar Technologies and Holley
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luminar and Holley is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Holley Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holley Inc 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 Holley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holley Inc has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Holley go up and down completely randomly.
Pair Corralation between Luminar Technologies and Holley
Given the investment horizon of 90 days Luminar Technologies is expected to generate 2.29 times more return on investment than Holley. However, Luminar Technologies is 2.29 times more volatile than Holley Inc. It trades about -0.03 of its potential returns per unit of risk. Holley Inc is currently generating about -0.17 per unit of risk. If you would invest 531.00 in Luminar Technologies on December 4, 2024 and sell it today you would lose (52.00) from holding Luminar Technologies or give up 9.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Luminar Technologies vs. Holley Inc
Performance |
Timeline |
Luminar Technologies |
Holley Inc |
Luminar Technologies and Holley Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luminar Technologies and Holley
The main advantage of trading using opposite Luminar Technologies and Holley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Holley 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 Holley will offset losses from the drop in Holley's long position.Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies, Common | Luminar Technologies vs. Innoviz Technologies |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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