Correlation Between LPKF Laser and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Cisco Systems 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 Cisco Systems 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 Cisco Systems, you can compare the effects of market volatilities on LPKF Laser and Cisco Systems 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Cisco Systems.
Diversification Opportunities for LPKF Laser and Cisco Systems
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Cisco is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of LPKF Laser i.e., LPKF Laser and Cisco Systems go up and down completely randomly.
Pair Corralation between LPKF Laser and Cisco Systems
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Cisco Systems. In addition to that, LPKF Laser is 4.82 times more volatile than Cisco Systems. It trades about -0.03 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.01 per unit of volatility. If you would invest 5,598 in Cisco Systems on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Cisco Systems or generate 0.04% 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. Cisco Systems
Performance |
| Timeline |
| LPKF Laser Electronics |
| Cisco Systems |
LPKF Laser and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Cisco Systems
The main advantage of trading using opposite LPKF Laser and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. SIVERS SEMICONDUCTORS AB | LPKF Laser vs. Norsk Hydro ASA |
| Cisco Systems vs. Nucletron Electronic Aktiengesellschaft | Cisco Systems vs. Fevertree Drinks PLC | Cisco Systems vs. ARROW ELECTRONICS | Cisco Systems vs. LPKF Laser Electronics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |