Correlation Between LPKF Laser and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals, you can compare the effects of market volatilities on LPKF Laser and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Silvercorp Metals.
Diversification Opportunities for LPKF Laser and Silvercorp Metals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LPKF and Silvercorp is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of LPKF Laser i.e., LPKF Laser and Silvercorp Metals go up and down completely randomly.
Pair Corralation between LPKF Laser and Silvercorp Metals
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 0.15 times more return on investment than Silvercorp Metals. However, LPKF Laser Electronics is 6.89 times less risky than Silvercorp Metals. It trades about -0.15 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.31 per unit of risk. If you would invest 880.00 in LPKF Laser Electronics on September 1, 2024 and sell it today you would lose (20.00) from holding LPKF Laser Electronics or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Silvercorp Metals
Performance |
| Timeline |
| LPKF Laser Electronics |
| Silvercorp Metals |
LPKF Laser and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Silvercorp Metals
The main advantage of trading using opposite LPKF Laser and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| LPKF Laser vs. Coor Service Management | LPKF Laser vs. Empire Metals Limited | LPKF Laser vs. Adriatic Metals | LPKF Laser vs. Golden Metal Resources |
| Silvercorp Metals vs. Uniper SE | Silvercorp Metals vs. Mulberry Group PLC | Silvercorp Metals vs. London Security Plc | Silvercorp Metals vs. Triad Group PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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