Correlation Between Luna Innovations and FARO Technologies
Can any of the company-specific risk be diversified away by investing in both Luna Innovations and FARO Technologies 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 Luna Innovations and FARO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luna Innovations Incorporated and FARO Technologies, you can compare the effects of market volatilities on Luna Innovations and FARO Technologies 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 Luna Innovations with a short position of FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luna Innovations and FARO Technologies.
Diversification Opportunities for Luna Innovations and FARO Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luna and FARO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luna Innovations Incorporated and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies and Luna Innovations 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 Luna Innovations Incorporated are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of Luna Innovations i.e., Luna Innovations and FARO Technologies go up and down completely randomly.
Pair Corralation between Luna Innovations and FARO Technologies
If you would invest 2,587 in FARO Technologies on December 26, 2024 and sell it today you would earn a total of 227.00 from holding FARO Technologies or generate 8.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Luna Innovations Incorporated vs. FARO Technologies
Performance |
Timeline |
Luna Innovations |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
FARO Technologies |
Luna Innovations and FARO Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luna Innovations and FARO Technologies
The main advantage of trading using opposite Luna Innovations and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luna Innovations position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.Luna Innovations vs. ESCO Technologies | Luna Innovations vs. Know Labs | Luna Innovations vs. Focus Universal | Luna Innovations vs. Sono Tek Corp |
FARO Technologies vs. Coherent | FARO Technologies vs. ESCO Technologies | FARO Technologies vs. Mesa Laboratories | FARO Technologies vs. Vishay Precision Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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