Correlation Between LPKF Laser and Flow Traders
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on LPKF Laser and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Flow Traders.
Diversification Opportunities for LPKF Laser and Flow Traders
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between LPKF and Flow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of LPKF Laser i.e., LPKF Laser and Flow Traders go up and down completely randomly.
Pair Corralation between LPKF Laser and Flow Traders
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Flow Traders. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.05 times less risky than Flow Traders. The stock trades about -0.04 of its potential returns per unit of risk. The Flow Traders NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,749 in Flow Traders NV on September 12, 2024 and sell it today you would earn a total of 359.00 from holding Flow Traders NV or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Flow Traders NV
Performance |
| Timeline |
| LPKF Laser Electronics |
| Flow Traders NV |
LPKF Laser and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Flow Traders
The main advantage of trading using opposite LPKF Laser and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| LPKF Laser vs. Hong Kong Land | LPKF Laser vs. Neometals | LPKF Laser vs. Coor Service Management | LPKF Laser vs. Fidelity Sustainable USD |
| Flow Traders vs. Hong Kong Land | Flow Traders vs. Neometals | Flow Traders vs. Coor Service Management | Flow Traders vs. Fidelity Sustainable USD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |