Correlation Between LPKF Laser and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Concurrent Technologies 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 Concurrent Technologies 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 Concurrent Technologies Plc, you can compare the effects of market volatilities on LPKF Laser and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Concurrent Technologies.
Diversification Opportunities for LPKF Laser and Concurrent Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LPKF and Concurrent is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of LPKF Laser i.e., LPKF Laser and Concurrent Technologies go up and down completely randomly.
Pair Corralation between LPKF Laser and Concurrent Technologies
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Concurrent Technologies. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.75 times less risky than Concurrent Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Concurrent Technologies Plc is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 14,000 in Concurrent Technologies Plc on November 7, 2024 and sell it today you would earn a total of 3,900 from holding Concurrent Technologies Plc or generate 27.86% 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. Concurrent Technologies Plc
Performance |
| Timeline |
| LPKF Laser Electronics |
| Concurrent Technologies |
LPKF Laser and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Concurrent Technologies
The main advantage of trading using opposite LPKF Laser and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| LPKF Laser vs. Telecom Italia SpA | LPKF Laser vs. Empire Metals Limited | LPKF Laser vs. Europa Metals | LPKF Laser vs. Spirent Communications plc |
| Concurrent Technologies vs. Public Storage | Concurrent Technologies vs. Ion Beam Applications | Concurrent Technologies vs. Silver Bullet Data | Concurrent Technologies vs. Alliance Data Systems |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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