Correlation Between LPKF Laser and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Bellevue Healthcare 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 Bellevue Healthcare 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 Bellevue Healthcare Trust, you can compare the effects of market volatilities on LPKF Laser and Bellevue Healthcare 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 Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Bellevue Healthcare.
Diversification Opportunities for LPKF Laser and Bellevue Healthcare
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Bellevue is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust 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 Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of LPKF Laser i.e., LPKF Laser and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between LPKF Laser and Bellevue Healthcare
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Bellevue Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.83 times less risky than Bellevue Healthcare. The stock trades about -0.11 of its potential returns per unit of risk. The Bellevue Healthcare Trust is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14,180 in Bellevue Healthcare Trust on August 31, 2024 and sell it today you would lose (80.00) from holding Bellevue Healthcare Trust or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Bellevue Healthcare Trust
Performance |
| Timeline |
| LPKF Laser Electronics |
| Bellevue Healthcare Trust |
LPKF Laser and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Bellevue Healthcare
The main advantage of trading using opposite LPKF Laser and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| LPKF Laser vs. Neometals | LPKF Laser vs. Coor Service Management | LPKF Laser vs. Aeorema Communications Plc | LPKF Laser vs. JLEN Environmental Assets |
| Bellevue Healthcare vs. Samsung Electronics Co | Bellevue Healthcare vs. Samsung Electronics Co | Bellevue Healthcare vs. Hyundai Motor | Bellevue Healthcare vs. Toyota Motor Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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