Correlation Between Luminar Technologies and PARTS ID

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

By analyzing existing cross correlation between Luminar Technologies and PARTS ID, you can compare the effects of market volatilities on Luminar Technologies and PARTS ID 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 PARTS ID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and PARTS ID.

Diversification Opportunities for Luminar Technologies and PARTS ID

-0.15

Correlation Coefficient

Luminar Technologies  PARTS ID

Good diversification

The 3 months correlation between Luminar and PARTS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and PARTS ID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARTS ID 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 PARTS ID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARTS ID has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and PARTS ID go up and down completely randomly.

Pair Corralation between Luminar Technologies and PARTS ID

If you would invest  42.00  in PARTS ID on October 8, 2024 and sell it today you would earn a total of  0.00  from holding PARTS ID or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Luminar Technologies  vs.  PARTS ID

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.

PARTS ID

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PARTS ID has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, PARTS ID is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Luminar Technologies and PARTS ID

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

The idea behind Luminar Technologies and PARTS ID 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.