Correlation Between LPKF Laser and Pets At
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Pets At 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 Pets At 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 Pets at Home, you can compare the effects of market volatilities on LPKF Laser and Pets At 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 Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Pets At.
Diversification Opportunities for LPKF Laser and Pets At
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LPKF and Pets is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of LPKF Laser i.e., LPKF Laser and Pets At go up and down completely randomly.
Pair Corralation between LPKF Laser and Pets At
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 0.71 times more return on investment than Pets At. However, LPKF Laser Electronics is 1.41 times less risky than Pets At. It trades about 0.04 of its potential returns per unit of risk. Pets at Home is currently generating about -0.05 per unit of risk. If you would invest 805.00 in LPKF Laser Electronics on September 3, 2024 and sell it today you would earn a total of 55.00 from holding LPKF Laser Electronics or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Pets at Home
Performance |
| Timeline |
| LPKF Laser Electronics |
| Pets at Home |
LPKF Laser and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Pets At
The main advantage of trading using opposite LPKF Laser and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At's long position.| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. Magnora ASA | LPKF Laser vs. RTW Venture Fund |
| Pets At vs. United Airlines Holdings | Pets At vs. International Consolidated Airlines | Pets At vs. LPKF Laser Electronics | Pets At vs. Hilton Food Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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