Correlation Between Japan Asia and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and LPKF Laser Electronics, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and LPKF Laser.
Diversification Opportunities for Japan Asia and LPKF Laser
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and LPKF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment 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 Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and LPKF Laser go up and down completely randomly.
Pair Corralation between Japan Asia and LPKF Laser
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the LPKF Laser. In addition to that, Japan Asia is 1.05 times more volatile than LPKF Laser Electronics. It trades about -0.04 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.2 per unit of volatility. If you would invest 874.00 in LPKF Laser Electronics on October 14, 2024 and sell it today you would earn a total of 52.00 from holding LPKF Laser Electronics or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. LPKF Laser Electronics
Performance |
| Timeline |
| Japan Asia Investment |
| LPKF Laser Electronics |
Japan Asia and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and LPKF Laser
The main advantage of trading using opposite Japan Asia and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. WT OFFSHORE | Japan Asia vs. AEON STORES | Japan Asia vs. National Retail Properties | Japan Asia vs. Eidesvik Offshore ASA |
| LPKF Laser vs. WisdomTree Investments | LPKF Laser vs. National Beverage Corp | LPKF Laser vs. Gladstone Investment | LPKF Laser vs. Japan Asia Investment |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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