Correlation Between LPKF Laser and Perdoceo Education
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education, you can compare the effects of market volatilities on LPKF Laser and Perdoceo Education 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 Perdoceo Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Perdoceo Education.
Diversification Opportunities for LPKF Laser and Perdoceo Education
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Perdoceo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Perdoceo Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdoceo Education 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 Perdoceo Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdoceo Education has no effect on the direction of LPKF Laser i.e., LPKF Laser and Perdoceo Education go up and down completely randomly.
Pair Corralation between LPKF Laser and Perdoceo Education
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Perdoceo Education. In addition to that, LPKF Laser is 1.05 times more volatile than Perdoceo Education. It trades about -0.01 of its total potential returns per unit of risk. Perdoceo Education is currently generating about 0.07 per unit of volatility. If you would invest 1,296 in Perdoceo Education on August 27, 2024 and sell it today you would earn a total of 1,244 from holding Perdoceo Education or generate 95.99% 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. Perdoceo Education
Performance |
| Timeline |
| LPKF Laser Electronics |
| Perdoceo Education |
LPKF Laser and Perdoceo Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Perdoceo Education
The main advantage of trading using opposite LPKF Laser and Perdoceo Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Perdoceo Education 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 Perdoceo Education will offset losses from the drop in Perdoceo Education's long position.| LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. NMI Holdings | LPKF Laser vs. Origin Agritech | LPKF Laser vs. SIVERS SEMICONDUCTORS AB |
| Perdoceo Education vs. Fast Retailing Co | Perdoceo Education vs. FLOW TRADERS LTD | Perdoceo Education vs. SIDETRADE EO 1 | Perdoceo Education vs. SALESFORCE INC CDR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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