Correlation Between Luna Innovations and Genasys
Can any of the company-specific risk be diversified away by investing in both Luna Innovations and Genasys 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 Luna Innovations and Genasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luna Innovations Incorporated and Genasys, you can compare the effects of market volatilities on Luna Innovations and Genasys 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 Luna Innovations with a short position of Genasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luna Innovations and Genasys.
Diversification Opportunities for Luna Innovations and Genasys
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luna and Genasys is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Luna Innovations Incorporated and Genasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genasys and Luna Innovations 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 Luna Innovations Incorporated are associated (or correlated) with Genasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genasys has no effect on the direction of Luna Innovations i.e., Luna Innovations and Genasys go up and down completely randomly.
Pair Corralation between Luna Innovations and Genasys
Given the investment horizon of 90 days Luna Innovations Incorporated is expected to under-perform the Genasys. In addition to that, Luna Innovations is 1.31 times more volatile than Genasys. It trades about -0.06 of its total potential returns per unit of risk. Genasys is currently generating about 0.04 per unit of volatility. If you would invest 277.00 in Genasys on August 28, 2024 and sell it today you would earn a total of 99.00 from holding Genasys or generate 35.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luna Innovations Incorporated vs. Genasys
Performance |
| Timeline |
| Luna Innovations |
| Genasys |
Luna Innovations and Genasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luna Innovations and Genasys
The main advantage of trading using opposite Luna Innovations and Genasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luna Innovations position performs unexpectedly, Genasys 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 Genasys will offset losses from the drop in Genasys' long position.| Luna Innovations vs. ESCO Technologies | Luna Innovations vs. Know Labs | Luna Innovations vs. Focus Universal | Luna Innovations vs. Sono Tek 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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