Correlation Between LPKF Laser and Albion Technology
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Albion Technology 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 Albion Technology 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 Albion Technology General, you can compare the effects of market volatilities on LPKF Laser and Albion Technology 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 Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Albion Technology.
Diversification Opportunities for LPKF Laser and Albion Technology
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between LPKF and Albion is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General 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 Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of LPKF Laser i.e., LPKF Laser and Albion Technology go up and down completely randomly.
Pair Corralation between LPKF Laser and Albion Technology
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 1.89 times more return on investment than Albion Technology. However, LPKF Laser is 1.89 times more volatile than Albion Technology General. It trades about 0.05 of its potential returns per unit of risk. Albion Technology General is currently generating about 0.04 per unit of risk. If you would invest 796.00 in LPKF Laser Electronics on September 3, 2024 and sell it today you would earn a total of 73.00 from holding LPKF Laser Electronics or generate 9.17% 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. Albion Technology General
Performance |
| Timeline |
| LPKF Laser Electronics |
| Albion Technology General |
LPKF Laser and Albion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Albion Technology
The main advantage of trading using opposite LPKF Laser and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Albion Technology 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 Albion Technology will offset losses from the drop in Albion Technology's long position.| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. RTW Venture Fund | LPKF Laser vs. Secure Property Development |
| Albion Technology vs. Monks Investment Trust | Albion Technology vs. Herald Investment Trust | Albion Technology vs. Neometals | Albion Technology vs. Wheaton Precious Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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