Correlation Between LPKF Laser and TT Electronics
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and TT Electronics 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 TT Electronics 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 TT Electronics PLC, you can compare the effects of market volatilities on LPKF Laser and TT Electronics 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 TT Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and TT Electronics.
Diversification Opportunities for LPKF Laser and TT Electronics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and 7TT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and TT Electronics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TT Electronics PLC 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 TT Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TT Electronics PLC has no effect on the direction of LPKF Laser i.e., LPKF Laser and TT Electronics go up and down completely randomly.
Pair Corralation between LPKF Laser and TT Electronics
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.94 times more return on investment than TT Electronics. However, LPKF Laser Electronics is 1.06 times less risky than TT Electronics. It trades about 0.01 of its potential returns per unit of risk. TT Electronics PLC is currently generating about -0.01 per unit of risk. If you would invest 968.00 in LPKF Laser Electronics on September 23, 2024 and sell it today you would lose (78.00) from holding LPKF Laser Electronics or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. TT Electronics PLC
Performance |
| Timeline |
| LPKF Laser Electronics |
| TT Electronics PLC |
LPKF Laser and TT Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and TT Electronics
The main advantage of trading using opposite LPKF Laser and TT Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, TT Electronics 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 TT Electronics will offset losses from the drop in TT Electronics' long position.| LPKF Laser vs. SBI Insurance Group | LPKF Laser vs. Zurich Insurance Group | LPKF Laser vs. Entravision Communications | LPKF Laser vs. Hemisphere Energy Corp |
| TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |