Correlation Between UET United and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both UET United 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 UET United and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and LPKF Laser Electronics, you can compare the effects of market volatilities on UET United 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 UET United with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and LPKF Laser.
Diversification Opportunities for UET United and LPKF Laser
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UET and LPKF is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic 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 UET United 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 UET United Electronic 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 UET United i.e., UET United and LPKF Laser go up and down completely randomly.
Pair Corralation between UET United and LPKF Laser
Assuming the 90 days trading horizon UET United is expected to generate 1.62 times less return on investment than LPKF Laser. In addition to that, UET United is 1.73 times more volatile than LPKF Laser Electronics. It trades about 0.0 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.01 per unit of volatility. If you would invest 890.00 in LPKF Laser Electronics on August 31, 2024 and sell it today you would lose (30.00) from holding LPKF Laser Electronics or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
UET United Electronic vs. LPKF Laser Electronics
Performance |
| Timeline |
| UET United Electronic |
| LPKF Laser Electronics |
UET United and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and LPKF Laser
The main advantage of trading using opposite UET United and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United 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.| UET United vs. Motorola Solutions | UET United vs. Nokia | UET United vs. ZTE Corporation | UET United vs. Hewlett Packard Enterprise |
| LPKF Laser vs. ABB | LPKF Laser vs. Emerson Electric Co | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. NMI Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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