Correlation Between NLIGHT and Lightbridge Corp
Can any of the company-specific risk be diversified away by investing in both NLIGHT and Lightbridge Corp 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 NLIGHT and Lightbridge Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nLIGHT Inc and Lightbridge Corp, you can compare the effects of market volatilities on NLIGHT and Lightbridge Corp 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 NLIGHT with a short position of Lightbridge Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NLIGHT and Lightbridge Corp.
Diversification Opportunities for NLIGHT and Lightbridge Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NLIGHT and Lightbridge is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding nLIGHT Inc and Lightbridge Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightbridge Corp and NLIGHT 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 nLIGHT Inc are associated (or correlated) with Lightbridge Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightbridge Corp has no effect on the direction of NLIGHT i.e., NLIGHT and Lightbridge Corp go up and down completely randomly.
Pair Corralation between NLIGHT and Lightbridge Corp
Given the investment horizon of 90 days nLIGHT Inc is expected to generate 0.75 times more return on investment than Lightbridge Corp. However, nLIGHT Inc is 1.33 times less risky than Lightbridge Corp. It trades about 0.04 of its potential returns per unit of risk. Lightbridge Corp is currently generating about -0.28 per unit of risk. If you would invest 3,239 in nLIGHT Inc on September 3, 2025 and sell it today you would earn a total of 66.00 from holding nLIGHT Inc or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
nLIGHT Inc vs. Lightbridge Corp
Performance |
| Timeline |
| nLIGHT Inc |
| Lightbridge Corp |
NLIGHT and Lightbridge Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NLIGHT and Lightbridge Corp
The main advantage of trading using opposite NLIGHT and Lightbridge Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NLIGHT position performs unexpectedly, Lightbridge Corp 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 Lightbridge Corp will offset losses from the drop in Lightbridge Corp's long position.| NLIGHT vs. Universal Music Group | NLIGHT vs. Pintec Technology Holdings | NLIGHT vs. MGIC Investment Corp | NLIGHT vs. Kingdee International Software |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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