Correlation Between Judges Scientific and Light Science

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

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

Diversification Opportunities for Judges Scientific and Light Science

-0.73

Correlation Coefficient

Judges Scientific  Light Science

Pay attention - limited upside

The 3 months correlation between Judges and Light is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Judges Scientific Plc and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno and Judges Scientific 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 Judges Scientific Plc are associated (or correlated) with Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Judges Scientific i.e., Judges Scientific and Light Science go up and down completely randomly.

Pair Corralation between Judges Scientific and Light Science

Assuming the 90 days trading horizon Judges Scientific Plc is expected to generate 1.22 times more return on investment than Light Science. However, Judges Scientific is 1.22 times more volatile than Light Science Technologies. It trades about 0.22 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.18 per unit of risk. If you would invest  595,812  in Judges Scientific Plc on April 24, 2025 and sell it today you would earn a total of  218,188  from holding Judges Scientific Plc or generate 36.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Judges Scientific Plc  vs.  Light Science Technologies

Judges Scientific Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Judges Scientific Plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Judges Scientific exhibited solid returns over the last few months and may actually be approaching a breakup point.

Light Science Techno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Light Science Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Judges Scientific and Light Science

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

The idea behind Judges Scientific Plc and Light Science 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.