Correlation Between Marketing Worldwide and Luminar Technologies

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

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

Diversification Opportunities for Marketing Worldwide and Luminar Technologies

0.31

Correlation Coefficient

Marketing Worldwide  Luminar Technologies

Weak diversification

The 3 months correlation between Marketing and Luminar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Marketing Worldwide and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies and Marketing Worldwide 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 Marketing Worldwide are associated (or correlated) with Luminar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luminar Technologies has no effect on the direction of Marketing Worldwide i.e., Marketing Worldwide and Luminar Technologies go up and down completely randomly.

Pair Corralation between Marketing Worldwide and Luminar Technologies

Given the investment horizon of 90 days Marketing Worldwide is expected to generate 7.82 times more return on investment than Luminar Technologies. However, Marketing Worldwide is 7.82 times more volatile than Luminar Technologies. It trades about 0.17 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.12 per unit of risk. If you would invest  0.03  in Marketing Worldwide on October 8, 2024 and sell it today you would lose (0.01) from holding Marketing Worldwide or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Marketing Worldwide  vs.  Luminar Technologies

Marketing Worldwide

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marketing Worldwide are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Marketing Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Marketing Worldwide and Luminar Technologies

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

The idea behind Marketing Worldwide and Luminar Technologies 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.