Correlation Between LightPath Technologies and Cps Technologies

Can any of the company-specific risk be diversified away by investing in both LightPath Technologies and Cps 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 LightPath Technologies and Cps Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LightPath Technologies and Cps Technologies, you can compare the effects of market volatilities on LightPath Technologies and Cps 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 LightPath Technologies with a short position of Cps Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightPath Technologies and Cps Technologies.

Diversification Opportunities for LightPath Technologies and Cps Technologies

0.54

Correlation Coefficient

LightPath Technologies  Cps Technologies

Very weak diversification

The 3 months correlation between LightPath and Cps is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Cps Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cps Technologies and LightPath Technologies 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 LightPath Technologies are associated (or correlated) with Cps Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cps Technologies has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Cps Technologies go up and down completely randomly.

Pair Corralation between LightPath Technologies and Cps Technologies

Given the investment horizon of 90 days LightPath Technologies is expected to generate 1.29 times less return on investment than Cps Technologies. But when comparing it to its historical volatility, LightPath Technologies is 1.1 times less risky than Cps Technologies. It trades about 0.14 of its potential returns per unit of risk. Cps Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  185.00  in Cps Technologies on May 12, 2025 and sell it today you would earn a total of  100.00  from holding Cps Technologies or generate 54.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

LightPath Technologies  vs.  Cps Technologies

LightPath Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in LightPath Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, LightPath Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cps Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cps Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Cps Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LightPath Technologies and Cps Technologies

The main advantage of trading using opposite LightPath Technologies and Cps Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightPath Technologies position performs unexpectedly, Cps 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 Cps Technologies will offset losses from the drop in Cps Technologies' long position.

The idea behind LightPath Technologies and Cps Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.