Correlation Between LPKF Laser and Apple
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on LPKF Laser and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Apple.
Diversification Opportunities for LPKF Laser and Apple
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LPKF and Apple is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of LPKF Laser i.e., LPKF Laser and Apple go up and down completely randomly.
Pair Corralation between LPKF Laser and Apple
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 0.31 times more return on investment than Apple. However, LPKF Laser Electronics is 3.2 times less risky than Apple. It trades about -0.12 of its potential returns per unit of risk. Apple Inc is currently generating about -0.07 per unit of risk. If you would invest 887.00 in LPKF Laser Electronics on November 5, 2024 and sell it today you would lose (30.00) from holding LPKF Laser Electronics or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Apple Inc
Performance |
| Timeline |
| LPKF Laser Electronics |
| Apple Inc |
LPKF Laser and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Apple
The main advantage of trading using opposite LPKF Laser and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| LPKF Laser vs. Ebro Foods | LPKF Laser vs. Bell Food Group | LPKF Laser vs. Associated British Foods | LPKF Laser vs. Young Cos Brewery |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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