Correlation Between Bloomsbury Publishing and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and LPKF Laser Electronics, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and LPKF Laser.
Diversification Opportunities for Bloomsbury Publishing and LPKF Laser
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bloomsbury and LPKF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing 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 Bloomsbury Publishing 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 Bloomsbury Publishing 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and LPKF Laser go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and LPKF Laser
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the LPKF Laser. In addition to that, Bloomsbury Publishing is 2.79 times more volatile than LPKF Laser Electronics. It trades about -0.25 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.15 per unit of volatility. If you would invest 874.00 in LPKF Laser Electronics on August 25, 2024 and sell it today you would lose (19.00) from holding LPKF Laser Electronics or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. LPKF Laser Electronics
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| LPKF Laser Electronics |
Bloomsbury Publishing and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and LPKF Laser
The main advantage of trading using opposite Bloomsbury Publishing and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Sabien Technology Group | Bloomsbury Publishing vs. DXC Technology Co | Bloomsbury Publishing vs. Amedeo Air Four | Bloomsbury Publishing vs. Mindflair Plc |
| LPKF Laser vs. Samsung Electronics Co | LPKF Laser vs. Samsung Electronics Co | LPKF Laser vs. Hyundai Motor | LPKF Laser vs. Toyota Motor Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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