Correlation Between Wallbox NV and LightPath Technologies

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

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

Diversification Opportunities for Wallbox NV and LightPath Technologies

0.76

Correlation Coefficient

Wallbox NV  LightPath Technologies

Poor diversification

The 3 months correlation between Wallbox and LightPath is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wallbox NV and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and Wallbox NV 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 Wallbox NV are associated (or correlated) with LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Wallbox NV i.e., Wallbox NV and LightPath Technologies go up and down completely randomly.

Pair Corralation between Wallbox NV and LightPath Technologies

Considering the 90-day investment horizon Wallbox NV is expected to generate 1.35 times more return on investment than LightPath Technologies. However, Wallbox NV is 1.35 times more volatile than LightPath Technologies. It trades about -0.03 of its potential returns per unit of risk. LightPath Technologies is currently generating about -0.16 per unit of risk. If you would invest  45.00  in Wallbox NV on December 29, 2024 and sell it today you would lose (10.00) from holding Wallbox NV or give up 22.22% of portfolio value over 90 days.

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

Wallbox NV  vs.  LightPath Technologies

Wallbox NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallbox NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 weak 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.

Pair Trading with Wallbox NV and LightPath Technologies

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

The idea behind Wallbox NV and LightPath 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.