Correlation Between Luminar Technologies and Adient PLC
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Adient PLC 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 Luminar Technologies and Adient PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Adient PLC, you can compare the effects of market volatilities on Luminar Technologies and Adient PLC 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 Luminar Technologies with a short position of Adient PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Adient PLC.
Diversification Opportunities for Luminar Technologies and Adient PLC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Luminar and Adient is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Adient PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adient PLC and Luminar 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 Luminar Technologies are associated (or correlated) with Adient PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adient PLC has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Adient PLC go up and down completely randomly.
Pair Corralation between Luminar Technologies and Adient PLC
Given the investment horizon of 90 days Luminar Technologies is expected to generate 3.36 times more return on investment than Adient PLC. However, Luminar Technologies is 3.36 times more volatile than Adient PLC. It trades about 0.0 of its potential returns per unit of risk. Adient PLC is currently generating about -0.24 per unit of risk. If you would invest 81.00 in Luminar Technologies on August 23, 2024 and sell it today you would lose (5.00) from holding Luminar Technologies or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. Adient PLC
Performance |
| Timeline |
| Luminar Technologies |
| Adient PLC |
Luminar Technologies and Adient PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Adient PLC
The main advantage of trading using opposite Luminar Technologies and Adient PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Adient PLC 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 Adient PLC will offset losses from the drop in Adient PLC's long position.| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |