Correlation Between Laser Energetics and Northrop Grumman
Can any of the company-specific risk be diversified away by investing in both Laser Energetics and Northrop Grumman 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 Energetics and Northrop Grumman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Energetics and Northrop Grumman, you can compare the effects of market volatilities on Laser Energetics and Northrop Grumman 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 Energetics with a short position of Northrop Grumman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Energetics and Northrop Grumman.
Diversification Opportunities for Laser Energetics and Northrop Grumman
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Laser and Northrop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Laser Energetics and Northrop Grumman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northrop Grumman and Laser Energetics 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 Energetics are associated (or correlated) with Northrop Grumman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northrop Grumman has no effect on the direction of Laser Energetics i.e., Laser Energetics and Northrop Grumman go up and down completely randomly.
Pair Corralation between Laser Energetics and Northrop Grumman
If you would invest 0.00 in Laser Energetics on November 30, 2024 and sell it today you would earn a total of 0.00 from holding Laser Energetics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laser Energetics vs. Northrop Grumman
Performance |
| Timeline |
| Laser Energetics |
| Northrop Grumman |
Laser Energetics and Northrop Grumman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laser Energetics and Northrop Grumman
The main advantage of trading using opposite Laser Energetics and Northrop Grumman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Energetics position performs unexpectedly, Northrop Grumman 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 Northrop Grumman will offset losses from the drop in Northrop Grumman's long position.| Laser Energetics vs. Firan Technology Group | Laser Energetics vs. 808 Renewable Energy | Laser Energetics vs. Park Electrochemical | Laser Energetics vs. Innovative Solutions and |
| Northrop Grumman vs. Raytheon Technologies Corp | Northrop Grumman vs. General Dynamics | Northrop Grumman vs. The Boeing | Northrop Grumman vs. L3Harris Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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