Correlation Between LightPath Technologies and KULR Technology

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

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

Diversification Opportunities for LightPath Technologies and KULR Technology

0.81

Correlation Coefficient

LightPath Technologies  KULR Technology

Very poor diversification

The 3 months correlation between LightPath and KULR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group and LightPath 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 LightPath Technologies are associated (or correlated) with KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and KULR Technology go up and down completely randomly.

Pair Corralation between LightPath Technologies and KULR Technology

Given the investment horizon of 90 days LightPath Technologies is expected to generate 0.62 times more return on investment than KULR Technology. However, LightPath Technologies is 1.6 times less risky than KULR Technology. It trades about -0.16 of its potential returns per unit of risk. KULR Technology Group is currently generating about -0.16 per unit of risk. If you would invest  367.00  in LightPath Technologies on December 29, 2024 and sell it today you would lose (165.00) from holding LightPath Technologies or give up 44.96% of portfolio value over 90 days.

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

LightPath Technologies  vs.  KULR Technology Group

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.

KULR Technology Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with LightPath Technologies and KULR Technology

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

The idea behind LightPath Technologies and KULR Technology Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.