Correlation Between EMBARK EDUCATION and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and LPKF Laser Electronics, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and LPKF Laser.
Diversification Opportunities for EMBARK EDUCATION and LPKF Laser
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMBARK and LPKF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and LPKF Laser go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and LPKF Laser
Assuming the 90 days horizon EMBARK EDUCATION LTD is expected to generate 0.37 times more return on investment than LPKF Laser. However, EMBARK EDUCATION LTD is 2.67 times less risky than LPKF Laser. It trades about 0.13 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.04 per unit of risk. If you would invest 27.00 in EMBARK EDUCATION LTD on September 3, 2024 and sell it today you would earn a total of 4.00 from holding EMBARK EDUCATION LTD or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.34% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. LPKF Laser Electronics
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| LPKF Laser Electronics |
EMBARK EDUCATION and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and LPKF Laser
The main advantage of trading using opposite EMBARK EDUCATION and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. IDP EDUCATION LTD | EMBARK EDUCATION vs. LIFENET INSURANCE CO | EMBARK EDUCATION vs. CAREER EDUCATION | EMBARK EDUCATION vs. Major Drilling Group |
| LPKF Laser vs. IDP EDUCATION LTD | LPKF Laser vs. EMBARK EDUCATION LTD | LPKF Laser vs. CAREER EDUCATION | LPKF Laser vs. Adtalem Global Education |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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