Correlation Between Knorr Bremse and Luminar Technologies
Can any of the company-specific risk be diversified away by investing in both Knorr Bremse 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 Knorr Bremse and Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knorr Bremse Aktiengesellschaft and Luminar Technologies, you can compare the effects of market volatilities on Knorr Bremse 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 Knorr Bremse with a short position of Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knorr Bremse and Luminar Technologies.
Diversification Opportunities for Knorr Bremse and Luminar Technologies
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knorr and Luminar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Knorr Bremse Aktiengesellschaf and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies and Knorr Bremse 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 Knorr Bremse Aktiengesellschaft 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 Knorr Bremse i.e., Knorr Bremse and Luminar Technologies go up and down completely randomly.
Pair Corralation between Knorr Bremse and Luminar Technologies
Assuming the 90 days horizon Knorr Bremse Aktiengesellschaft is expected to generate 0.22 times more return on investment than Luminar Technologies. However, Knorr Bremse Aktiengesellschaft is 4.46 times less risky than Luminar Technologies. It trades about -0.06 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.07 per unit of risk. If you would invest 2,037 in Knorr Bremse Aktiengesellschaft on September 12, 2024 and sell it today you would lose (134.00) from holding Knorr Bremse Aktiengesellschaft or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knorr Bremse Aktiengesellschaf vs. Luminar Technologies
Performance |
| Timeline |
| Knorr Bremse Aktieng |
| Luminar Technologies |
Knorr Bremse and Luminar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knorr Bremse and Luminar Technologies
The main advantage of trading using opposite Knorr Bremse and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knorr Bremse 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.| Knorr Bremse vs. 4 Less Group | Knorr Bremse vs. Foresight Autonomous Holdings | Knorr Bremse vs. Goodyear Tire Rubber | Knorr Bremse vs. Luminar Technologies |
| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |