Correlation Between LPKF Laser and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on LPKF Laser and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Beeks Trading.
Diversification Opportunities for LPKF Laser and Beeks Trading
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Beeks is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of LPKF Laser i.e., LPKF Laser and Beeks Trading go up and down completely randomly.
Pair Corralation between LPKF Laser and Beeks Trading
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 3.62 times less risky than Beeks Trading. The stock trades about -0.06 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 27,000 in Beeks Trading on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Beeks Trading or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Beeks Trading
Performance |
| Timeline |
| LPKF Laser Electronics |
| Beeks Trading |
LPKF Laser and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Beeks Trading
The main advantage of trading using opposite LPKF Laser and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading'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 |
| Beeks Trading vs. GreenX Metals | Beeks Trading vs. Neometals | Beeks Trading vs. Silvercorp Metals | Beeks Trading 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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