Correlation Between LPKF Laser and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on LPKF Laser and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Lindsell Train.
Diversification Opportunities for LPKF Laser and Lindsell Train
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Lindsell is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of LPKF Laser i.e., LPKF Laser and Lindsell Train go up and down completely randomly.
Pair Corralation between LPKF Laser and Lindsell Train
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 1.02 times more return on investment than Lindsell Train. However, LPKF Laser is 1.02 times more volatile than Lindsell Train Investment. It trades about 0.05 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.05 per unit of risk. If you would invest 796.00 in LPKF Laser Electronics on September 3, 2024 and sell it today you would earn a total of 73.00 from holding LPKF Laser Electronics or generate 9.17% 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. Lindsell Train Investment
Performance |
| Timeline |
| LPKF Laser Electronics |
| Lindsell Train Investment |
LPKF Laser and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Lindsell Train
The main advantage of trading using opposite LPKF Laser and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. RTW Venture Fund | LPKF Laser vs. Secure Property Development |
| Lindsell Train vs. SBM Offshore NV | Lindsell Train vs. Air Products Chemicals | Lindsell Train vs. Vienna Insurance Group | Lindsell Train vs. Thor Mining PLC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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