Correlation Between Hong Kong and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Exchanges and LPKF Laser Electronics, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and LPKF Laser.
Diversification Opportunities for Hong Kong and LPKF Laser
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hong and LPKF is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Exchanges 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 Hong Kong 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 Hong Kong Exchanges 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 Hong Kong i.e., Hong Kong and LPKF Laser go up and down completely randomly.
Pair Corralation between Hong Kong and LPKF Laser
Assuming the 90 days trading horizon Hong Kong Exchanges is expected to under-perform the LPKF Laser. But the stock apears to be less risky and, when comparing its historical volatility, Hong Kong Exchanges is 2.89 times less risky than LPKF Laser. The stock trades about -0.48 of its potential returns per unit of risk. The LPKF Laser Electronics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 833.00 in LPKF Laser Electronics on October 11, 2024 and sell it today you would earn a total of 43.00 from holding LPKF Laser Electronics or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Exchanges vs. LPKF Laser Electronics
Performance |
| Timeline |
| Hong Kong Exchanges |
| LPKF Laser Electronics |
Hong Kong and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and LPKF Laser
The main advantage of trading using opposite Hong Kong and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. LPKF Laser Electronics | Hong Kong vs. Hanison Construction Holdings | Hong Kong vs. ITALIAN WINE BRANDS | Hong Kong vs. FARM 51 GROUP |
| LPKF Laser vs. PTT Global Chemical | LPKF Laser vs. Siamgas And Petrochemicals | LPKF Laser vs. GREENX METALS LTD | LPKF Laser vs. TRI CHEMICAL LABORATINC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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