Correlation Between LPKF Laser and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Suntory Beverage 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 Suntory Beverage 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 Suntory Beverage Food, you can compare the effects of market volatilities on LPKF Laser and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Suntory Beverage.
Diversification Opportunities for LPKF Laser and Suntory Beverage
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LPKF and Suntory is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of LPKF Laser i.e., LPKF Laser and Suntory Beverage go up and down completely randomly.
Pair Corralation between LPKF Laser and Suntory Beverage
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Suntory Beverage. In addition to that, LPKF Laser is 1.44 times more volatile than Suntory Beverage Food. It trades about -0.06 of its total potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.08 per unit of volatility. If you would invest 3,414 in Suntory Beverage Food on September 12, 2024 and sell it today you would lose (336.00) from holding Suntory Beverage Food or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Suntory Beverage Food
Performance |
| Timeline |
| LPKF Laser Electronics |
| Suntory Beverage Food |
LPKF Laser and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Suntory Beverage
The main advantage of trading using opposite LPKF Laser and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. SIVERS SEMICONDUCTORS AB | LPKF Laser vs. Norsk Hydro ASA |
| Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. SIVERS SEMICONDUCTORS AB | Suntory Beverage vs. NorAm Drilling AS | Suntory Beverage vs. Norsk Hydro ASA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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