Correlation Between Luna Innovations and SemiLEDS

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

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

Diversification Opportunities for Luna Innovations and SemiLEDS

0.0

Correlation Coefficient

Luna Innovations  SemiLEDS

Pay attention - limited upside

The 3 months correlation between Luna and SemiLEDS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luna Innovations Incorporated and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and Luna Innovations 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 Luna Innovations Incorporated are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Luna Innovations i.e., Luna Innovations and SemiLEDS go up and down completely randomly.

Pair Corralation between Luna Innovations and SemiLEDS

If you would invest (100.00) in Luna Innovations Incorporated on April 29, 2025 and sell it today you would earn a total of  100.00  from holding Luna Innovations Incorporated or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Luna Innovations Incorporated  vs.  SemiLEDS

Luna Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Luna Innovations Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Luna Innovations is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Luna Innovations and SemiLEDS

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

The idea behind Luna Innovations Incorporated and SemiLEDS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.