Correlation Between LightPath Technologies and Neonode
Can any of the company-specific risk be diversified away by investing in both LightPath Technologies and Neonode 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 Neonode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightPath Technologies and Neonode, you can compare the effects of market volatilities on LightPath Technologies and Neonode 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 Neonode. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightPath Technologies and Neonode.
Diversification Opportunities for LightPath Technologies and Neonode
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LightPath and Neonode is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode 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 Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Neonode go up and down completely randomly.
Pair Corralation between LightPath Technologies and Neonode
Given the investment horizon of 90 days LightPath Technologies is expected to under-perform the Neonode. In addition to that, LightPath Technologies is 1.7 times more volatile than Neonode. It trades about -0.31 of its total potential returns per unit of risk. Neonode is currently generating about -0.16 per unit of volatility. If you would invest 939.00 in Neonode on November 5, 2024 and sell it today you would lose (88.00) from holding Neonode or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
LightPath Technologies vs. Neonode
Performance |
| Timeline |
| LightPath Technologies |
| Neonode |
LightPath Technologies and Neonode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightPath Technologies and Neonode
The main advantage of trading using opposite LightPath Technologies and Neonode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightPath Technologies position performs unexpectedly, Neonode 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 Neonode will offset losses from the drop in Neonode's long position.| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
| Neonode vs. LightPath Technologies | Neonode vs. Methode Electronics | Neonode vs. OSI Systems | Neonode vs. Plexus 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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