Correlation Between Luminar Technologies and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Luminar Technologies and Sumitomo Electric 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 Sumitomo Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luminar Technologies and Sumitomo Electric Industries, you can compare the effects of market volatilities on Luminar Technologies and Sumitomo Electric 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 Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luminar Technologies and Sumitomo Electric.
Diversification Opportunities for Luminar Technologies and Sumitomo Electric
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luminar and Sumitomo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Luminar Technologies and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric 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 Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Luminar Technologies i.e., Luminar Technologies and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Luminar Technologies and Sumitomo Electric
Given the investment horizon of 90 days Luminar Technologies is expected to under-perform the Sumitomo Electric. In addition to that, Luminar Technologies is 2.93 times more volatile than Sumitomo Electric Industries. It trades about -0.18 of its total potential returns per unit of risk. Sumitomo Electric Industries is currently generating about 0.43 per unit of volatility. If you would invest 1,511 in Sumitomo Electric Industries on August 28, 2024 and sell it today you would earn a total of 423.00 from holding Sumitomo Electric Industries or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luminar Technologies vs. Sumitomo Electric Industries
Performance |
| Timeline |
| Luminar Technologies |
| Sumitomo Electric |
Luminar Technologies and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luminar Technologies and Sumitomo Electric
The main advantage of trading using opposite Luminar Technologies and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luminar Technologies position performs unexpectedly, Sumitomo Electric 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 Sumitomo Electric will offset losses from the drop in Sumitomo Electric'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 |
| Sumitomo Electric vs. Allison Transmission Holdings | Sumitomo Electric vs. Luminar Technologies | Sumitomo Electric vs. Lear Corporation | Sumitomo Electric vs. BorgWarner |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |