Correlation Between LPKF Laser and Nationwide Building
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Nationwide Building 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 Nationwide Building 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 Nationwide Building Society, you can compare the effects of market volatilities on LPKF Laser and Nationwide Building 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 Nationwide Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Nationwide Building.
Diversification Opportunities for LPKF Laser and Nationwide Building
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LPKF and Nationwide is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Nationwide Building Society in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Building 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 Nationwide Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Building has no effect on the direction of LPKF Laser i.e., LPKF Laser and Nationwide Building go up and down completely randomly.
Pair Corralation between LPKF Laser and Nationwide Building
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to under-perform the Nationwide Building. In addition to that, LPKF Laser is 7.99 times more volatile than Nationwide Building Society. It trades about -0.06 of its total potential returns per unit of risk. Nationwide Building Society is currently generating about -0.22 per unit of volatility. If you would invest 13,100 in Nationwide Building Society on October 29, 2024 and sell it today you would lose (100.00) from holding Nationwide Building Society or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Nationwide Building Society
Performance |
| Timeline |
| LPKF Laser Electronics |
| Nationwide Building |
LPKF Laser and Nationwide Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Nationwide Building
The main advantage of trading using opposite LPKF Laser and Nationwide Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Nationwide Building 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 Nationwide Building will offset losses from the drop in Nationwide Building's long position.| LPKF Laser vs. Bankers Investment Trust | LPKF Laser vs. Mobius Investment Trust | LPKF Laser vs. National Beverage Corp | LPKF Laser vs. Smithson Investment Trust |
| Nationwide Building vs. Cornish Metals | Nationwide Building vs. URU Metals | Nationwide Building vs. Austevoll Seafood ASA | Nationwide Building vs. BW Offshore |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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