Correlation Between LPKF Laser and Hong Kong
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Hong Kong 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 Hong Kong 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 Hong Kong Exchanges, you can compare the effects of market volatilities on LPKF Laser and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Hong Kong.
Diversification Opportunities for LPKF Laser and Hong Kong
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Hong is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of LPKF Laser i.e., LPKF Laser and Hong Kong go up and down completely randomly.
Pair Corralation between LPKF Laser and Hong Kong
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 2.89 times more return on investment than Hong Kong. However, LPKF Laser is 2.89 times more volatile than Hong Kong Exchanges. It trades about 0.13 of its potential returns per unit of risk. Hong Kong Exchanges is currently generating about -0.48 per unit of risk. If you would invest 833.00 in LPKF Laser Electronics on October 11, 2024 and sell it today you would earn a total of 43.00 from holding LPKF Laser Electronics or generate 5.16% 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. Hong Kong Exchanges
Performance |
| Timeline |
| LPKF Laser Electronics |
| Hong Kong Exchanges |
LPKF Laser and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Hong Kong
The main advantage of trading using opposite LPKF Laser and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| LPKF Laser vs. PTT Global Chemical | LPKF Laser vs. Siamgas And Petrochemicals | LPKF Laser vs. GREENX METALS LTD | LPKF Laser vs. TRI CHEMICAL LABORATINC |
| Hong Kong vs. LPKF Laser Electronics | Hong Kong vs. Hanison Construction Holdings | Hong Kong vs. ITALIAN WINE BRANDS | Hong Kong vs. FARM 51 GROUP |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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