Correlation Between Sypris Solutions and Luminar Technologies
Can any of the company-specific risk be diversified away by investing in both Sypris Solutions 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 Sypris Solutions and Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sypris Solutions and Luminar Technologies, you can compare the effects of market volatilities on Sypris Solutions 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 Sypris Solutions with a short position of Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sypris Solutions and Luminar Technologies.
Diversification Opportunities for Sypris Solutions and Luminar Technologies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sypris and Luminar is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sypris Solutions and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies and Sypris Solutions 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 Sypris Solutions 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 Sypris Solutions i.e., Sypris Solutions and Luminar Technologies go up and down completely randomly.
Pair Corralation between Sypris Solutions and Luminar Technologies
Given the investment horizon of 90 days Sypris Solutions is expected to generate 1.25 times more return on investment than Luminar Technologies. However, Sypris Solutions is 1.25 times more volatile than Luminar Technologies. It trades about 0.12 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.12 per unit of risk. If you would invest 136.00 in Sypris Solutions on November 1, 2024 and sell it today you would earn a total of 83.40 from holding Sypris Solutions or generate 61.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sypris Solutions vs. Luminar Technologies
Performance |
| Timeline |
| Sypris Solutions |
| Luminar Technologies |
Sypris Solutions and Luminar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sypris Solutions and Luminar Technologies
The main advantage of trading using opposite Sypris Solutions and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sypris Solutions 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.| Sypris Solutions vs. Monro Muffler Brake | Sypris Solutions vs. Magna International | Sypris Solutions vs. BorgWarner | Sypris Solutions vs. Mobileye Global Class |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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