Correlation Between Luminar Technologies and Astra International

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

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

Diversification Opportunities for Luminar Technologies and Astra International

0.03

Correlation Coefficient

Luminar Technologies  Astra International

Significant diversification

The 3 months correlation between Luminar and Astra is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Astra International go up and down completely randomly.

Pair Corralation between Luminar Technologies and Astra International

Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the Astra International. In addition to that, Luminar Technologies is 3.45 times more volatile than Astra International Tbk. It trades about -0.08 of its total potential returns per unit of risk. Astra International Tbk is currently generating about 0.0 per unit of volatility. If you would invest  647.00  in Astra International Tbk on September 1, 2024 and sell it today you would lose (12.00) from holding Astra International Tbk or give up 1.85% of portfolio value over 90 days.

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

Luminar Technologies  vs.  Astra International Tbk

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 December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Luminar Technologies and Astra International

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

The idea behind Luminar Technologies and Astra International Tbk 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.