Correlation Between Luminar Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Dow Jones Industrial, you can compare the effects of market volatilities on Luminar Technologies and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Dow Jones.
Diversification Opportunities for Luminar Technologies and Dow Jones
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luminar and Dow is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between Luminar Technologies and Dow Jones
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the Dow Jones. In addition to that, Luminar Technologies is 7.64 times more volatile than Dow Jones Industrial. It trades about -0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 4,292,489 in Dow Jones Industrial on August 23, 2024 and sell it today you would earn a total of 94,546 from holding Dow Jones Industrial or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. Dow Jones Industrial
Performance |
| Timeline |
Luminar Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Luminar Technologies
Pair trading matchups for Luminar Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Luminar Technologies and Dow Jones
The main advantage of trading using opposite Luminar Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |