Correlation Between LPKF Laser and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Jadestone Energy 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 Jadestone Energy 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 Jadestone Energy, you can compare the effects of market volatilities on LPKF Laser and Jadestone Energy 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 Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Jadestone Energy.
Diversification Opportunities for LPKF Laser and Jadestone Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPKF and Jadestone is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy 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 Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of LPKF Laser i.e., LPKF Laser and Jadestone Energy go up and down completely randomly.
Pair Corralation between LPKF Laser and Jadestone Energy
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Jadestone Energy. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.37 times less risky than Jadestone Energy. The stock trades about -0.15 of its potential returns per unit of risk. The Jadestone Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Jadestone Energy on September 14, 2024 and sell it today you would earn a total of 50.00 from holding Jadestone Energy or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Jadestone Energy
Performance |
| Timeline |
| LPKF Laser Electronics |
| Jadestone Energy |
LPKF Laser and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Jadestone Energy
The main advantage of trading using opposite LPKF Laser and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| LPKF Laser vs. Samsung Electronics Co | LPKF Laser vs. Samsung Electronics Co | LPKF Laser vs. Hyundai Motor | LPKF Laser vs. Reliance Industries Ltd |
| Jadestone Energy vs. LPKF Laser Electronics | Jadestone Energy vs. Infrastrutture Wireless Italiane | Jadestone Energy vs. Scandic Hotels Group | Jadestone Energy vs. Electronic Arts |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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