Correlation Between Adriatic Metals and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals and LPKF Laser Electronics, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and LPKF Laser.
Diversification Opportunities for Adriatic Metals and LPKF Laser
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adriatic and LPKF is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals i.e., Adriatic Metals and LPKF Laser go up and down completely randomly.
Pair Corralation between Adriatic Metals and LPKF Laser
Assuming the 90 days trading horizon Adriatic Metals is expected to under-perform the LPKF Laser. In addition to that, Adriatic Metals is 1.79 times more volatile than LPKF Laser Electronics. It trades about -0.01 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.04 per unit of volatility. If you would invest 805.00 in LPKF Laser Electronics on September 3, 2024 and sell it today you would earn a total of 55.00 from holding LPKF Laser Electronics or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals vs. LPKF Laser Electronics
Performance |
| Timeline |
| Adriatic Metals |
| LPKF Laser Electronics |
Adriatic Metals and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and LPKF Laser
The main advantage of trading using opposite Adriatic Metals and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.| Adriatic Metals vs. United Utilities Group | Adriatic Metals vs. Medical Properties Trust | Adriatic Metals vs. Federal Realty Investment | Adriatic Metals vs. Schroders Investment Trusts |
| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. Magnora ASA | LPKF Laser vs. RTW Venture Fund |
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.
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