Correlation Between LPKF Laser and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and SIDETRADE 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 SIDETRADE 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 SIDETRADE EO 1, you can compare the effects of market volatilities on LPKF Laser and SIDETRADE 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 SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and SIDETRADE.
Diversification Opportunities for LPKF Laser and SIDETRADE
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPKF and SIDETRADE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 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 SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of LPKF Laser i.e., LPKF Laser and SIDETRADE go up and down completely randomly.
Pair Corralation between LPKF Laser and SIDETRADE
Assuming the 90 days horizon LPKF Laser is expected to generate 1.84 times less return on investment than SIDETRADE. In addition to that, LPKF Laser is 1.75 times more volatile than SIDETRADE EO 1. It trades about 0.06 of its total potential returns per unit of risk. SIDETRADE EO 1 is currently generating about 0.19 per unit of volatility. If you would invest 22,100 in SIDETRADE EO 1 on October 30, 2024 and sell it today you would earn a total of 3,700 from holding SIDETRADE EO 1 or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. SIDETRADE EO 1
Performance |
| Timeline |
| LPKF Laser Electronics |
| SIDETRADE EO 1 |
LPKF Laser and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and SIDETRADE
The main advantage of trading using opposite LPKF Laser and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE's long position.| LPKF Laser vs. ECHO INVESTMENT ZY | LPKF Laser vs. Keck Seng Investments | LPKF Laser vs. PennantPark Investment | LPKF Laser vs. JLF INVESTMENT |
| SIDETRADE vs. SOGECLAIR SA INH | SIDETRADE vs. Norwegian Air Shuttle | SIDETRADE vs. ALTAIR RES INC | SIDETRADE vs. SEALED AIR |
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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