Correlation Between Seaport Entertainment and Luminar Technologies
Can any of the company-specific risk be diversified away by investing in both Seaport Entertainment and Luminar Technologies 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 Seaport Entertainment and Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seaport Entertainment Group and Luminar Technologies, you can compare the effects of market volatilities on Seaport Entertainment and Luminar Technologies 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 Seaport Entertainment with a short position of Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaport Entertainment and Luminar Technologies.
Diversification Opportunities for Seaport Entertainment and Luminar Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seaport and Luminar is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Seaport Entertainment Group and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies and Seaport Entertainment 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 Seaport Entertainment Group are associated (or correlated) with Luminar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luminar Technologies has no effect on the direction of Seaport Entertainment i.e., Seaport Entertainment and Luminar Technologies go up and down completely randomly.
Pair Corralation between Seaport Entertainment and Luminar Technologies
Considering the 90-day investment horizon Seaport Entertainment Group is expected to generate 0.68 times more return on investment than Luminar Technologies. However, Seaport Entertainment Group is 1.47 times less risky than Luminar Technologies. It trades about 0.08 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.14 per unit of risk. If you would invest 2,685 in Seaport Entertainment Group on September 5, 2024 and sell it today you would earn a total of 343.00 from holding Seaport Entertainment Group or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seaport Entertainment Group vs. Luminar Technologies
Performance |
| Timeline |
| Seaport Entertainment |
| Luminar Technologies |
Seaport Entertainment and Luminar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seaport Entertainment and Luminar Technologies
The main advantage of trading using opposite Seaport Entertainment and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaport Entertainment position performs unexpectedly, Luminar Technologies 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 Luminar Technologies will offset losses from the drop in Luminar Technologies' long position.| Seaport Entertainment vs. FitLife Brands, Common | Seaport Entertainment vs. Bridgford Foods | Seaport Entertainment vs. Academy Sports Outdoors | Seaport Entertainment vs. Verra Mobility Corp |
| Luminar Technologies vs. Mobileye Global Class | Luminar Technologies vs. Hyliion Holdings Corp | Luminar Technologies vs. Aeva Technologies | Luminar Technologies vs. Innoviz Technologies |
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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