Correlation Between Dairy Farm and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Dairy Farm 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 Dairy Farm and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and LPKF Laser Electronics, you can compare the effects of market volatilities on Dairy Farm 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 Dairy Farm with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and LPKF Laser.
Diversification Opportunities for Dairy Farm and LPKF Laser
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dairy and LPKF is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International 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 Dairy Farm 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 Dairy Farm International 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 Dairy Farm i.e., Dairy Farm and LPKF Laser go up and down completely randomly.
Pair Corralation between Dairy Farm and LPKF Laser
Assuming the 90 days trading horizon Dairy Farm International is expected to generate 0.97 times more return on investment than LPKF Laser. However, Dairy Farm International is 1.03 times less risky than LPKF Laser. It trades about -0.01 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.01 per unit of risk. If you would invest 278.00 in Dairy Farm International on November 8, 2024 and sell it today you would lose (60.00) from holding Dairy Farm International or give up 21.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. LPKF Laser Electronics
Performance |
| Timeline |
| Dairy Farm International |
| LPKF Laser Electronics |
Dairy Farm and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and LPKF Laser
The main advantage of trading using opposite Dairy Farm and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm 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.| Dairy Farm vs. MAG SILVER | Dairy Farm vs. Perseus Mining Limited | Dairy Farm vs. THORNEY TECHS LTD | Dairy Farm vs. Endeavour Mining PLC |
| LPKF Laser vs. Ribbon Communications | LPKF Laser vs. Cars Inc | LPKF Laser vs. Comba Telecom Systems | LPKF Laser vs. China Communications Services |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |