Correlation Between LPKF Laser and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on LPKF Laser and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Advanced Medical.
Diversification Opportunities for LPKF Laser and Advanced Medical
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Advanced is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of LPKF Laser i.e., LPKF Laser and Advanced Medical go up and down completely randomly.
Pair Corralation between LPKF Laser and Advanced Medical
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Advanced Medical. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.0 times less risky than Advanced Medical. The stock trades about -0.01 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 277.00 in Advanced Medical Solutions on October 11, 2024 and sell it today you would lose (51.00) from holding Advanced Medical Solutions or give up 18.41% 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. Advanced Medical Solutions
Performance |
| Timeline |
| LPKF Laser Electronics |
| Advanced Medical Sol |
LPKF Laser and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Advanced Medical
The main advantage of trading using opposite LPKF Laser and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical'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 |
| Advanced Medical vs. De Grey Mining | Advanced Medical vs. NXP Semiconductors NV | Advanced Medical vs. MINCO SILVER | Advanced Medical vs. Yanzhou Coal Mining |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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