Correlation Between Laser Photonics and Tennant
Can any of the company-specific risk be diversified away by investing in both Laser Photonics and Tennant 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 Tennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Photonics and Tennant Company, you can compare the effects of market volatilities on Laser Photonics and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and Tennant.
Diversification Opportunities for Laser Photonics and Tennant
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Laser and Tennant is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of Laser Photonics i.e., Laser Photonics and Tennant go up and down completely randomly.
Pair Corralation between Laser Photonics and Tennant
Given the investment horizon of 90 days Laser Photonics is expected to generate 1.93 times more return on investment than Tennant. However, Laser Photonics is 1.93 times more volatile than Tennant Company. It trades about 0.08 of its potential returns per unit of risk. Tennant Company is currently generating about -0.01 per unit of risk. If you would invest 522.00 in Laser Photonics on August 31, 2024 and sell it today you would earn a total of 37.00 from holding Laser Photonics or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laser Photonics vs. Tennant Company
Performance |
| Timeline |
| Laser Photonics |
| Tennant Company |
Laser Photonics and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laser Photonics and Tennant
The main advantage of trading using opposite Laser Photonics and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Photonics position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
| Tennant vs. Flowserve | Tennant vs. Franklin Electric Co | Tennant vs. Watts Water Technologies | Tennant vs. Gorman Rupp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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