Correlation Between Albion Technology and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and LPKF Laser Electronics, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and LPKF Laser.
Diversification Opportunities for Albion Technology and LPKF Laser
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Albion and LPKF is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and LPKF Laser go up and down completely randomly.
Pair Corralation between Albion Technology and LPKF Laser
Assuming the 90 days trading horizon Albion Technology is expected to generate 1.3 times less return on investment than LPKF Laser. But when comparing it to its historical volatility, Albion Technology General is 1.81 times less risky than LPKF Laser. It trades about 0.04 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 819.00 in LPKF Laser Electronics on September 1, 2024 and sell it today you would earn a total of 41.00 from holding LPKF Laser Electronics or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. LPKF Laser Electronics
Performance |
| Timeline |
| Albion Technology General |
| LPKF Laser Electronics |
Albion Technology and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and LPKF Laser
The main advantage of trading using opposite Albion Technology and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Reliance Industries Ltd |
| LPKF Laser vs. Coor Service Management | LPKF Laser vs. Empire Metals Limited | LPKF Laser vs. Adriatic Metals | LPKF Laser vs. Golden Metal Resources |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |