Correlation Between LPKF Laser and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Benchmark 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 Benchmark 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 Benchmark Electronics, you can compare the effects of market volatilities on LPKF Laser and Benchmark 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Benchmark Electronics.
Diversification Opportunities for LPKF Laser and Benchmark Electronics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Benchmark is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of LPKF Laser i.e., LPKF Laser and Benchmark Electronics go up and down completely randomly.
Pair Corralation between LPKF Laser and Benchmark Electronics
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.72 times more return on investment than Benchmark Electronics. However, LPKF Laser Electronics is 1.4 times less risky than Benchmark Electronics. It trades about 0.11 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.08 per unit of risk. If you would invest 891.00 in LPKF Laser Electronics on October 29, 2024 and sell it today you would earn a total of 23.00 from holding LPKF Laser Electronics or generate 2.58% 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. Benchmark Electronics
Performance |
Timeline |
LPKF Laser Electronics |
Benchmark Electronics |
LPKF Laser and Benchmark Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LPKF Laser and Benchmark Electronics
The main advantage of trading using opposite LPKF Laser and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Benchmark 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.LPKF Laser vs. Honeywell International | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. Eaton PLC | LPKF Laser vs. Trane Technologies plc |
Benchmark Electronics vs. Corporate Travel Management | Benchmark Electronics vs. Treasury Wine Estates | Benchmark Electronics vs. Q2M Managementberatung AG | Benchmark Electronics vs. Carsales |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |