Correlation Between Lendinvest PLC and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and LPKF Laser Electronics, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and LPKF Laser.
Diversification Opportunities for Lendinvest PLC and LPKF Laser
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendinvest and LPKF is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC i.e., Lendinvest PLC and LPKF Laser go up and down completely randomly.
Pair Corralation between Lendinvest PLC and LPKF Laser
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 1.69 times more return on investment than LPKF Laser. However, Lendinvest PLC is 1.69 times more volatile than LPKF Laser Electronics. It trades about 0.08 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.1 per unit of risk. If you would invest 2,600 in Lendinvest PLC on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Lendinvest PLC or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. LPKF Laser Electronics
Performance |
| Timeline |
| Lendinvest PLC |
| LPKF Laser Electronics |
Lendinvest PLC and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and LPKF Laser
The main advantage of trading using opposite Lendinvest PLC and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Jupiter Fund Management |
| LPKF Laser vs. Lendinvest PLC | LPKF Laser vs. Neometals | LPKF Laser vs. Albion Technology General | LPKF Laser vs. Jupiter Fund Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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