Correlation Between LPKF Laser and Associated British
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on LPKF Laser and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Associated British.
Diversification Opportunities for LPKF Laser and Associated British
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LPKF and Associated is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of LPKF Laser i.e., LPKF Laser and Associated British go up and down completely randomly.
Pair Corralation between LPKF Laser and Associated British
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 0.51 times more return on investment than Associated British. However, LPKF Laser Electronics is 1.97 times less risky than Associated British. It trades about -0.06 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.14 per unit of risk. If you would invest 868.00 in LPKF Laser Electronics on September 2, 2024 and sell it today you would lose (8.00) from holding LPKF Laser Electronics or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Associated British Foods
Performance |
| Timeline |
| LPKF Laser Electronics |
| Associated British Foods |
LPKF Laser and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Associated British
The main advantage of trading using opposite LPKF Laser and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| LPKF Laser vs. Uniper SE | LPKF Laser vs. Mulberry Group PLC | LPKF Laser vs. London Security Plc | LPKF Laser vs. Triad Group PLC |
| Associated British vs. Vitec Software Group | Associated British vs. Kinnevik Investment AB | Associated British vs. Kaufman Et Broad | Associated British vs. Tatton Asset Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |