Correlation Between Luminar Technologies and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and ECARX Holdings 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 ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and ECARX Holdings Class, you can compare the effects of market volatilities on Luminar Technologies and ECARX Holdings 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 ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and ECARX Holdings.
Diversification Opportunities for Luminar Technologies and ECARX Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luminar and ECARX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and ECARX Holdings go up and down completely randomly.
Pair Corralation between Luminar Technologies and ECARX Holdings
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Luminar Technologies is 1.22 times less risky than ECARX Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The ECARX Holdings Class is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,007 in ECARX Holdings Class on August 26, 2024 and sell it today you would lose (846.00) from holding ECARX Holdings Class or give up 84.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. ECARX Holdings Class
Performance |
| Timeline |
| Luminar Technologies |
| ECARX Holdings Class |
Luminar Technologies and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and ECARX Holdings
The main advantage of trading using opposite Luminar Technologies and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, ECARX Holdings 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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