Correlation Between Luminar Technologies and Autoliv
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Autoliv 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 Autoliv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Autoliv, you can compare the effects of market volatilities on Luminar Technologies and Autoliv 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 Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Autoliv.
Diversification Opportunities for Luminar Technologies and Autoliv
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luminar and Autoliv is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv 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 Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Autoliv go up and down completely randomly.
Pair Corralation between Luminar Technologies and Autoliv
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the Autoliv. In addition to that, Luminar Technologies is 3.53 times more volatile than Autoliv. It trades about -0.09 of its total potential returns per unit of risk. Autoliv is currently generating about 0.0 per unit of volatility. If you would invest 10,044 in Autoliv on August 29, 2024 and sell it today you would lose (115.00) from holding Autoliv or give up 1.14% 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. Autoliv
Performance |
| Timeline |
| Luminar Technologies |
| Autoliv |
Luminar Technologies and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Autoliv
The main advantage of trading using opposite Luminar Technologies and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv'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 |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |