Correlation Between Deltex Medical and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Deltex Medical 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 Deltex Medical and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and LPKF Laser Electronics, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and LPKF Laser.
Diversification Opportunities for Deltex Medical and LPKF Laser
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deltex and LPKF is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group 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 Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and LPKF Laser go up and down completely randomly.
Pair Corralation between Deltex Medical and LPKF Laser
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the LPKF Laser. In addition to that, Deltex Medical is 4.86 times more volatile than LPKF Laser Electronics. It trades about -0.22 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 880.00 in LPKF Laser Electronics on September 1, 2024 and sell it today you would lose (20.00) from holding LPKF Laser Electronics or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. LPKF Laser Electronics
Performance |
| Timeline |
| Deltex Medical Group |
| LPKF Laser Electronics |
Deltex Medical and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and LPKF Laser
The main advantage of trading using opposite Deltex Medical and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. HCA Healthcare | Deltex Medical vs. Metals Exploration Plc | Deltex Medical vs. Bisichi Mining PLC | Deltex Medical vs. PureTech Health plc |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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