Correlation Between Laser Photonics and Standex International
Can any of the company-specific risk be diversified away by investing in both Laser Photonics and Standex International 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 Laser Photonics and Standex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Photonics and Standex International, you can compare the effects of market volatilities on Laser Photonics and Standex International 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 Laser Photonics with a short position of Standex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and Standex International.
Diversification Opportunities for Laser Photonics and Standex International
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Laser and Standex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International and Laser Photonics 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 Laser Photonics are associated (or correlated) with Standex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standex International has no effect on the direction of Laser Photonics i.e., Laser Photonics and Standex International go up and down completely randomly.
Pair Corralation between Laser Photonics and Standex International
Given the investment horizon of 90 days Laser Photonics is expected to generate 1.06 times less return on investment than Standex International. In addition to that, Laser Photonics is 1.88 times more volatile than Standex International. It trades about 0.08 of its total potential returns per unit of risk. Standex International is currently generating about 0.16 per unit of volatility. If you would invest 18,894 in Standex International on August 31, 2024 and sell it today you would earn a total of 1,895 from holding Standex International or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laser Photonics vs. Standex International
Performance |
| Timeline |
| Laser Photonics |
| Standex International |
Laser Photonics and Standex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laser Photonics and Standex International
The main advantage of trading using opposite Laser Photonics and Standex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Photonics position performs unexpectedly, Standex International 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 Standex International will offset losses from the drop in Standex International's long position.| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
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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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