Correlation Between LPKF Laser and Various Eateries
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Various Eateries 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 Various Eateries 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 Various Eateries PLC, you can compare the effects of market volatilities on LPKF Laser and Various Eateries 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 Various Eateries. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Various Eateries.
Diversification Opportunities for LPKF Laser and Various Eateries
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LPKF and Various is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Various Eateries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Various Eateries PLC 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 Various Eateries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Various Eateries PLC has no effect on the direction of LPKF Laser i.e., LPKF Laser and Various Eateries go up and down completely randomly.
Pair Corralation between LPKF Laser and Various Eateries
Assuming the 90 days trading horizon LPKF Laser Electronics is expected to generate 1.3 times more return on investment than Various Eateries. However, LPKF Laser is 1.3 times more volatile than Various Eateries PLC. It trades about -0.01 of its potential returns per unit of risk. Various Eateries PLC is currently generating about -0.15 per unit of risk. If you would invest 978.00 in LPKF Laser Electronics on January 16, 2025 and sell it today you would lose (158.00) from holding LPKF Laser Electronics or give up 16.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Various Eateries PLC
Performance |
| Timeline |
| LPKF Laser Electronics |
| Various Eateries PLC |
LPKF Laser and Various Eateries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Various Eateries
The main advantage of trading using opposite LPKF Laser and Various Eateries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Various Eateries 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 Various Eateries will offset losses from the drop in Various Eateries' long position.| LPKF Laser vs. Hong Kong Land | LPKF Laser vs. abrdn Property Income | LPKF Laser vs. alstria office REIT AG | LPKF Laser vs. SANTANDER UK 10 |
| Various Eateries vs. Samsung Electronics Co | Various Eateries vs. Samsung Electronics Co | Various Eateries vs. Samsung Electronics Co | Various Eateries vs. Toyota Motor Corp |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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