Correlation Between LPKF Laser and Endo International
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Endo International 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 Endo International 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 Endo International PLC, you can compare the effects of market volatilities on LPKF Laser and Endo International 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 Endo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Endo International.
Diversification Opportunities for LPKF Laser and Endo International
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPKF and Endo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Endo International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endo International PLC 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 Endo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endo International PLC has no effect on the direction of LPKF Laser i.e., LPKF Laser and Endo International go up and down completely randomly.
Pair Corralation between LPKF Laser and Endo International
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 2.74 times more return on investment than Endo International. However, LPKF Laser is 2.74 times more volatile than Endo International PLC. It trades about 0.05 of its potential returns per unit of risk. Endo International PLC is currently generating about -0.03 per unit of risk. If you would invest 851.00 in LPKF Laser Electronics on September 18, 2024 and sell it today you would earn a total of 17.00 from holding LPKF Laser Electronics or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Endo International PLC
Performance |
| Timeline |
| LPKF Laser Electronics |
| Endo International PLC |
LPKF Laser and Endo International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Endo International
The main advantage of trading using opposite LPKF Laser and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Endo International 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 Endo International will offset losses from the drop in Endo International's long position.| LPKF Laser vs. Hollywood Bowl Group | LPKF Laser vs. G5 Entertainment AB | LPKF Laser vs. SBM Offshore NV | LPKF Laser vs. Gaming Realms plc |
| Endo International vs. Melia Hotels | Endo International vs. AMG Advanced Metallurgical | Endo International vs. GreenX Metals | Endo International 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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