Correlation Between Westport Fuel and Luminar Technologies
Can any of the company-specific risk be diversified away by investing in both Westport Fuel 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 Westport Fuel and Luminar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Luminar Technologies, you can compare the effects of market volatilities on Westport Fuel 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 Westport Fuel with a short position of Luminar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Luminar Technologies.
Diversification Opportunities for Westport Fuel and Luminar Technologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Westport and Luminar is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Luminar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luminar Technologies and Westport Fuel 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 Westport Fuel Systems 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 Westport Fuel i.e., Westport Fuel and Luminar Technologies go up and down completely randomly.
Pair Corralation between Westport Fuel and Luminar Technologies
Given the investment horizon of 90 days Westport Fuel Systems is expected to generate 0.26 times more return on investment than Luminar Technologies. However, Westport Fuel Systems is 3.83 times less risky than Luminar Technologies. It trades about 0.14 of its potential returns per unit of risk. Luminar Technologies is currently generating about -0.17 per unit of risk. If you would invest 423.00 in Westport Fuel Systems on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Westport Fuel Systems or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Luminar Technologies
Performance |
| Timeline |
| Westport Fuel Systems |
| Luminar Technologies |
Westport Fuel and Luminar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Luminar Technologies
The main advantage of trading using opposite Westport Fuel and Luminar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel 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.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |