Correlation Between LightPath Technologies and Ouster
Can any of the company-specific risk be diversified away by investing in both LightPath Technologies and Ouster 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 Ouster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightPath Technologies and Ouster Inc, you can compare the effects of market volatilities on LightPath Technologies and Ouster 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 Ouster. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightPath Technologies and Ouster.
Diversification Opportunities for LightPath Technologies and Ouster
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LightPath and Ouster is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Ouster Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster Inc 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 Ouster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster Inc has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Ouster go up and down completely randomly.
Pair Corralation between LightPath Technologies and Ouster
Given the investment horizon of 90 days LightPath Technologies is expected to generate 1.25 times less return on investment than Ouster. But when comparing it to its historical volatility, LightPath Technologies is 1.8 times less risky than Ouster. It trades about 0.03 of its potential returns per unit of risk. Ouster Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Ouster Inc on August 27, 2024 and sell it today you would lose (307.00) from holding Ouster Inc or give up 24.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LightPath Technologies vs. Ouster Inc
Performance |
| Timeline |
| LightPath Technologies |
| Ouster Inc |
LightPath Technologies and Ouster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightPath Technologies and Ouster
The main advantage of trading using opposite LightPath Technologies and Ouster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightPath Technologies position performs unexpectedly, Ouster 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 Ouster will offset losses from the drop in Ouster's long position.| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
| Ouster vs. KULR Technology Group | Ouster vs. LightPath Technologies | Ouster vs. Daktronics | Ouster vs. Kopin |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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