Correlation Between LPKF Laser and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on LPKF Laser and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Batm Advanced.
Diversification Opportunities for LPKF Laser and Batm Advanced
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LPKF and Batm is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of LPKF Laser i.e., LPKF Laser and Batm Advanced go up and down completely randomly.
Pair Corralation between LPKF Laser and Batm Advanced
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 1.2 times more return on investment than Batm Advanced. However, LPKF Laser is 1.2 times more volatile than Batm Advanced Communications. It trades about -0.03 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.14 per unit of risk. If you would invest 905.00 in LPKF Laser Electronics on November 28, 2024 and sell it today you would lose (24.00) from holding LPKF Laser Electronics or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Batm Advanced Communications
Performance |
| Timeline |
| LPKF Laser Electronics |
| Batm Advanced Commun |
LPKF Laser and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Batm Advanced
The main advantage of trading using opposite LPKF Laser and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| LPKF Laser vs. National Beverage Corp | LPKF Laser vs. Monks Investment Trust | LPKF Laser vs. Austevoll Seafood ASA | LPKF Laser vs. International Consolidated Airlines |
| Batm Advanced vs. Ion Beam Applications | Batm Advanced vs. Rosslyn Data Technologies | Batm Advanced vs. Datalogic | Batm Advanced vs. Public Storage |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |