Correlation Between LightPath Technologies and Maris Tech
Can any of the company-specific risk be diversified away by investing in both LightPath Technologies and Maris Tech 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 Maris Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightPath Technologies and Maris Tech, you can compare the effects of market volatilities on LightPath Technologies and Maris Tech 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 Maris Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightPath Technologies and Maris Tech.
Diversification Opportunities for LightPath Technologies and Maris Tech
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LightPath and Maris is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Maris Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maris Tech 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 Maris Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maris Tech has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Maris Tech go up and down completely randomly.
Pair Corralation between LightPath Technologies and Maris Tech
Given the investment horizon of 90 days LightPath Technologies is expected to generate 0.79 times more return on investment than Maris Tech. However, LightPath Technologies is 1.26 times less risky than Maris Tech. It trades about -0.17 of its potential returns per unit of risk. Maris Tech is currently generating about -0.44 per unit of risk. If you would invest 379.00 in LightPath Technologies on November 3, 2024 and sell it today you would lose (79.00) from holding LightPath Technologies or give up 20.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LightPath Technologies vs. Maris Tech
Performance |
| Timeline |
| LightPath Technologies |
| Maris Tech |
LightPath Technologies and Maris Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightPath Technologies and Maris Tech
The main advantage of trading using opposite LightPath Technologies and Maris Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightPath Technologies position performs unexpectedly, Maris Tech 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 Maris Tech will offset losses from the drop in Maris Tech's long position.| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
| Maris Tech vs. Methode Electronics | Maris Tech vs. LightPath Technologies | Maris Tech vs. Interlink Electronics | Maris Tech vs. SigmaTron International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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