Correlation Between AIXTRON SE and Lasertec
Can any of the company-specific risk be diversified away by investing in both AIXTRON SE and Lasertec 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 AIXTRON SE and Lasertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIXTRON SE and Lasertec, you can compare the effects of market volatilities on AIXTRON SE and Lasertec 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 AIXTRON SE with a short position of Lasertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIXTRON SE and Lasertec.
Diversification Opportunities for AIXTRON SE and Lasertec
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AIXTRON and Lasertec is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AIXTRON SE and Lasertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lasertec and AIXTRON SE 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 AIXTRON SE are associated (or correlated) with Lasertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lasertec has no effect on the direction of AIXTRON SE i.e., AIXTRON SE and Lasertec go up and down completely randomly.
Pair Corralation between AIXTRON SE and Lasertec
Assuming the 90 days horizon AIXTRON SE is expected to under-perform the Lasertec. In addition to that, AIXTRON SE is 1.6 times more volatile than Lasertec. It trades about -0.16 of its total potential returns per unit of risk. Lasertec is currently generating about 0.24 per unit of volatility. If you would invest 9,702 in Lasertec on November 3, 2024 and sell it today you would earn a total of 828.00 from holding Lasertec or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
AIXTRON SE vs. Lasertec
Performance |
| Timeline |
| AIXTRON SE |
| Lasertec |
AIXTRON SE and Lasertec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIXTRON SE and Lasertec
The main advantage of trading using opposite AIXTRON SE and Lasertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIXTRON SE position performs unexpectedly, Lasertec 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 Lasertec will offset losses from the drop in Lasertec's long position.| AIXTRON SE vs. Sumco Corp ADR | AIXTRON SE vs. Disco Corp ADR | AIXTRON SE vs. Tokyo Electron | AIXTRON SE vs. Asm Pacific Technology |
| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Disco Corp ADR | Lasertec vs. Tokyo Electron |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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