Correlation Between Luminar Technologies and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Hesai Group American, you can compare the effects of market volatilities on Luminar Technologies and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Hesai Group.
Diversification Opportunities for Luminar Technologies and Hesai Group
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luminar and Hesai is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Hesai Group go up and down completely randomly.
Pair Corralation between Luminar Technologies and Hesai Group
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the Hesai Group. But the stock apears to be less risky and, when comparing its historical volatility, Luminar Technologies is 1.15 times less risky than Hesai Group. The stock trades about -0.1 of its potential returns per unit of risk. The Hesai Group American is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Hesai Group American on October 31, 2024 and sell it today you would earn a total of 1,053 from holding Hesai Group American or generate 222.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. Hesai Group American
Performance |
| Timeline |
| Luminar Technologies |
| Hesai Group American |
Luminar Technologies and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Hesai Group
The main advantage of trading using opposite Luminar Technologies and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group'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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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