Correlation Between TT Electronics and LPKF Laser

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both TT Electronics 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 TT Electronics and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TT Electronics PLC and LPKF Laser Electronics, you can compare the effects of market volatilities on TT Electronics 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 TT Electronics with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of TT Electronics and LPKF Laser.

Diversification Opportunities for TT Electronics and LPKF Laser

7TTLPKFDiversified Away7TTLPKFDiversified Away100%
-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between 7TT and LPKF is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TT Electronics PLC 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 TT Electronics 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 TT Electronics PLC 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 TT Electronics i.e., TT Electronics and LPKF Laser go up and down completely randomly.

Pair Corralation between TT Electronics and LPKF Laser

Assuming the 90 days trading horizon TT Electronics PLC is expected to under-perform the LPKF Laser. But the stock apears to be less risky and, when comparing its historical volatility, TT Electronics PLC is 3.26 times less risky than LPKF Laser. The stock trades about -0.13 of its potential returns per unit of risk. The LPKF Laser Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  896.00  in LPKF Laser Electronics on November 19, 2024 and sell it today you would earn a total of  16.00  from holding LPKF Laser Electronics or generate 1.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TT Electronics PLC  vs.  LPKF Laser Electronics

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030405060
JavaScript chart by amCharts 3.21.157TT LPK
       Timeline  
TT Electronics PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days TT Electronics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.051.11.151.21.251.31.351.4
LPKF Laser Electronics 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in LPKF Laser Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LPKF Laser may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.599.5

TT Electronics and LPKF Laser Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.07-9.79-6.51-3.230.03.286.6710.0613.4516.84 0.0150.0200.0250.030
JavaScript chart by amCharts 3.21.157TT LPK
       Returns  

Pair Trading with TT Electronics and LPKF Laser

The main advantage of trading using opposite TT Electronics and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TT Electronics 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.
The idea behind TT Electronics PLC and LPKF Laser Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

Other Complementary Tools

Stocks Directory
Find actively traded stocks across global markets
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Commodity Directory
Find actively traded commodities issued by global exchanges