Correlation Between SPDR SP and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and LightPath Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and LightPath Technologies, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and LightPath Technologies.
Diversification Opportunities for SPDR SP and LightPath Technologies
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and LightPath is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and SPDR SP 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 SPDR SP 500 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 SPDR SP i.e., SPDR SP and LightPath Technologies go up and down completely randomly.
Pair Corralation between SPDR SP and LightPath Technologies
Considering the 90-day investment horizon SPDR SP is expected to generate 7.37 times less return on investment than LightPath Technologies. But when comparing it to its historical volatility, SPDR SP 500 is 8.49 times less risky than LightPath Technologies. It trades about 0.22 of its potential returns per unit of risk. LightPath Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 294.00 in LightPath Technologies on June 5, 2025 and sell it today you would earn a total of 197.00 from holding LightPath Technologies or generate 67.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. LightPath Technologies
Performance |
| Timeline |
| SPDR SP 500 |
| LightPath Technologies |
SPDR SP and LightPath Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and LightPath Technologies
The main advantage of trading using opposite SPDR SP and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
| LightPath Technologies vs. Bel Fuse A | LightPath Technologies vs. Cemtrex | LightPath Technologies vs. CTS Corporation | LightPath Technologies vs. MicroCloud Hologram |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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