Correlation Between LPKF Laser and United Breweries
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and United Breweries 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 United Breweries 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 United Breweries Co, you can compare the effects of market volatilities on LPKF Laser and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and United Breweries.
Diversification Opportunities for LPKF Laser and United Breweries
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and United is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of LPKF Laser i.e., LPKF Laser and United Breweries go up and down completely randomly.
Pair Corralation between LPKF Laser and United Breweries
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the United Breweries. In addition to that, LPKF Laser is 1.42 times more volatile than United Breweries Co. It trades about -0.01 of its total potential returns per unit of risk. United Breweries Co is currently generating about -0.01 per unit of volatility. If you would invest 1,304 in United Breweries Co on October 16, 2024 and sell it today you would lose (184.00) from holding United Breweries Co or give up 14.11% 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. United Breweries Co
Performance |
| Timeline |
| LPKF Laser Electronics |
| United Breweries |
LPKF Laser and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and United Breweries
The main advantage of trading using opposite LPKF Laser and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| LPKF Laser vs. UPDATE SOFTWARE | LPKF Laser vs. MagnaChip Semiconductor Corp | LPKF Laser vs. NTG Nordic Transport | LPKF Laser vs. Yuexiu Transport Infrastructure |
| United Breweries vs. Nucletron Electronic Aktiengesellschaft | United Breweries vs. PTT Global Chemical | United Breweries vs. Electronic Arts | United Breweries 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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