Correlation Between LPKF Laser and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and FRACTAL GAMING 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 LPKF Laser and FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPKF Laser Electronics and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on LPKF Laser and FRACTAL GAMING 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 LPKF Laser with a short position of FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and FRACTAL GAMING.
Diversification Opportunities for LPKF Laser and FRACTAL GAMING
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPKF and FRACTAL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP and LPKF Laser 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 LPKF Laser Electronics are associated (or correlated) with FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of LPKF Laser i.e., LPKF Laser and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between LPKF Laser and FRACTAL GAMING
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the FRACTAL GAMING. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.17 times less risky than FRACTAL GAMING. The stock trades about -0.01 of its potential returns per unit of risk. The FRACTAL GAMING GROUP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 216.00 in FRACTAL GAMING GROUP on October 11, 2024 and sell it today you would earn a total of 93.00 from holding FRACTAL GAMING GROUP or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
LPKF Laser Electronics vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| LPKF Laser Electronics |
| FRACTAL GAMING GROUP |
LPKF Laser and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and FRACTAL GAMING
The main advantage of trading using opposite LPKF Laser and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.| LPKF Laser vs. MOLSON RS BEVERAGE | LPKF Laser vs. Nexstar Media Group | LPKF Laser vs. ZINC MEDIA GR | LPKF Laser vs. Fuji Media Holdings |
| FRACTAL GAMING vs. COFCO Joycome Foods | FRACTAL GAMING vs. LPKF Laser Electronics | FRACTAL GAMING vs. SENECA FOODS A | FRACTAL GAMING vs. AOI Electronics Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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