Correlation Between TITAN MACHINERY and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and LPKF Laser 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 TITAN MACHINERY and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and LPKF Laser Electronics, you can compare the effects of market volatilities on TITAN MACHINERY and LPKF Laser 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 TITAN MACHINERY with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and LPKF Laser.
Diversification Opportunities for TITAN MACHINERY and LPKF Laser
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TITAN and LPKF is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics and TITAN MACHINERY 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 TITAN MACHINERY are associated (or correlated) with LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and LPKF Laser go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and LPKF Laser
Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 2.07 times more return on investment than LPKF Laser. However, TITAN MACHINERY is 2.07 times more volatile than LPKF Laser Electronics. It trades about 0.4 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.05 per unit of risk. If you would invest 1,360 in TITAN MACHINERY on November 3, 2024 and sell it today you would earn a total of 450.00 from holding TITAN MACHINERY or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TITAN MACHINERY vs. LPKF Laser Electronics
Performance |
| Timeline |
| TITAN MACHINERY |
| LPKF Laser Electronics |
TITAN MACHINERY and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and LPKF Laser
The main advantage of trading using opposite TITAN MACHINERY and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| TITAN MACHINERY vs. National Beverage Corp | TITAN MACHINERY vs. THAI BEVERAGE | TITAN MACHINERY vs. Fevertree Drinks PLC | TITAN MACHINERY vs. Universal Health Realty |
| LPKF Laser vs. AAC TECHNOLOGHLDGADR | LPKF Laser vs. FORTRESS BIOTECHPRFA 25 | LPKF Laser vs. VELA TECHNOLPLC LS 0001 | LPKF Laser vs. BJs Restaurants |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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