Correlation Between Luminar Technologies and AEye
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and AEye 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 AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and AEye Inc, you can compare the effects of market volatilities on Luminar Technologies and AEye 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 AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and AEye.
Diversification Opportunities for Luminar Technologies and AEye
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luminar and AEye is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc 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 AEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEye Inc has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and AEye go up and down completely randomly.
Pair Corralation between Luminar Technologies and AEye
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the AEye. But the stock apears to be less risky and, when comparing its historical volatility, Luminar Technologies is 4.52 times less risky than AEye. The stock trades about -0.08 of its potential returns per unit of risk. The AEye Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.50 in AEye Inc on September 14, 2024 and sell it today you would earn a total of 1.17 from holding AEye Inc or generate 234.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Luminar Technologies vs. AEye Inc
Performance |
| Timeline |
| Luminar Technologies |
| AEye Inc |
Luminar Technologies and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and AEye
The main advantage of trading using opposite Luminar Technologies and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, AEye 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 AEye will offset losses from the drop in AEye'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 |
| AEye vs. Innoviz Technologies | AEye vs. Luminar Technologies | AEye vs. Aeva Technologies | AEye vs. Quantumscape Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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