Correlation Between LPKF Laser and Fidelity National
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Fidelity National 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 LPKF Laser and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPKF Laser Electronics and Fidelity National Information, you can compare the effects of market volatilities on LPKF Laser and Fidelity National 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 LPKF Laser with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Fidelity National.
Diversification Opportunities for LPKF Laser and Fidelity National
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Fidelity is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and LPKF Laser 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 LPKF Laser Electronics are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of LPKF Laser i.e., LPKF Laser and Fidelity National go up and down completely randomly.
Pair Corralation between LPKF Laser and Fidelity National
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Fidelity National. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.74 times less risky than Fidelity National. The stock trades about -0.01 of its potential returns per unit of risk. The Fidelity National Information is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,087 in Fidelity National Information on October 13, 2024 and sell it today you would earn a total of 645.00 from holding Fidelity National Information or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Fidelity National Information
Performance |
| Timeline |
| LPKF Laser Electronics |
| Fidelity National |
LPKF Laser and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Fidelity National
The main advantage of trading using opposite LPKF Laser and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| LPKF Laser vs. Morgan Advanced Materials | LPKF Laser vs. Abingdon Health Plc | LPKF Laser vs. Cardinal Health | LPKF Laser vs. Martin Marietta Materials |
| Fidelity National vs. Gamma Communications PLC | Fidelity National vs. GoldMining | Fidelity National vs. Electronic Arts | Fidelity National vs. LPKF Laser Electronics |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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