Correlation Between LPKF Laser and MPH Health
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on LPKF Laser and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and MPH Health.
Diversification Opportunities for LPKF Laser and MPH Health
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and MPH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of LPKF Laser i.e., LPKF Laser and MPH Health go up and down completely randomly.
Pair Corralation between LPKF Laser and MPH Health
Assuming the 90 days horizon LPKF Laser is expected to generate 1.35 times less return on investment than MPH Health. But when comparing it to its historical volatility, LPKF Laser Electronics is 1.09 times less risky than MPH Health. It trades about 0.11 of its potential returns per unit of risk. MPH Health Care is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,260 in MPH Health Care on October 30, 2024 and sell it today you would earn a total of 80.00 from holding MPH Health Care or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. MPH Health Care
Performance |
| Timeline |
| LPKF Laser Electronics |
| MPH Health Care |
LPKF Laser and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and MPH Health
The main advantage of trading using opposite LPKF Laser and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health'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 |
| MPH Health vs. ANTA SPORTS PRODUCT | MPH Health vs. USWE SPORTS AB | MPH Health vs. Playa Hotels Resorts | MPH Health vs. Aristocrat Leisure Limited |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |