Correlation Between Advanced Micro and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and LightPath 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 Advanced Micro and LightPath Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and LightPath Technologies, you can compare the effects of market volatilities on Advanced Micro and LightPath 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 Advanced Micro with a short position of LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and LightPath Technologies.
Diversification Opportunities for Advanced Micro and LightPath Technologies
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Advanced and LightPath is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Advanced Micro i.e., Advanced Micro and LightPath Technologies go up and down completely randomly.
Pair Corralation between Advanced Micro and LightPath Technologies
Considering the 90-day investment horizon Advanced Micro is expected to generate 1.69 times less return on investment than LightPath Technologies. But when comparing it to its historical volatility, Advanced Micro Devices is 1.35 times less risky than LightPath Technologies. It trades about 0.04 of its potential returns per unit of risk. LightPath Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 174.00 in LightPath Technologies on April 26, 2025 and sell it today you would earn a total of 132.00 from holding LightPath Technologies or generate 75.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Advanced Micro Devices vs. LightPath Technologies
Performance |
Timeline |
Advanced Micro Devices |
LightPath Technologies |
Advanced Micro and LightPath Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advanced Micro and LightPath Technologies
The main advantage of trading using opposite Advanced Micro and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, LightPath 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 LightPath Technologies will offset losses from the drop in LightPath Technologies' long position.Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
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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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