Correlation Between LightPath Technologies and Meta Materials
Can any of the company-specific risk be diversified away by investing in both LightPath Technologies and Meta Materials 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 LightPath Technologies and Meta Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightPath Technologies and Meta Materials, you can compare the effects of market volatilities on LightPath Technologies and Meta Materials 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 LightPath Technologies with a short position of Meta Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightPath Technologies and Meta Materials.
Diversification Opportunities for LightPath Technologies and Meta Materials
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LightPath and Meta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials and LightPath 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 LightPath Technologies are associated (or correlated) with Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Meta Materials go up and down completely randomly.
Pair Corralation between LightPath Technologies and Meta Materials
Given the investment horizon of 90 days LightPath Technologies is expected to generate 0.22 times more return on investment than Meta Materials. However, LightPath Technologies is 4.58 times less risky than Meta Materials. It trades about 0.03 of its potential returns per unit of risk. Meta Materials is currently generating about -0.03 per unit of risk. If you would invest 126.00 in LightPath Technologies on August 28, 2024 and sell it today you would earn a total of 39.00 from holding LightPath Technologies or generate 30.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
LightPath Technologies vs. Meta Materials
Performance |
| Timeline |
| LightPath Technologies |
| Meta Materials |
LightPath Technologies and Meta Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightPath Technologies and Meta Materials
The main advantage of trading using opposite LightPath Technologies and Meta Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightPath Technologies position performs unexpectedly, Meta Materials 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 Meta Materials will offset losses from the drop in Meta Materials' long position.| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
| Meta Materials vs. Cps Technologies | Meta Materials vs. Kopin | Meta Materials vs. Wallbox NV | Meta Materials vs. Corning Incorporated |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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