Correlation Between LPKF Laser and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and BANDAI NAMCO 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 BANDAI NAMCO 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 BANDAI NAMCO Holdings, you can compare the effects of market volatilities on LPKF Laser and BANDAI NAMCO 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 BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and BANDAI NAMCO.
Diversification Opportunities for LPKF Laser and BANDAI NAMCO
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between LPKF and BANDAI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings 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 BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of LPKF Laser i.e., LPKF Laser and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between LPKF Laser and BANDAI NAMCO
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the BANDAI NAMCO. In addition to that, LPKF Laser is 1.46 times more volatile than BANDAI NAMCO Holdings. It trades about -0.02 of its total potential returns per unit of risk. BANDAI NAMCO Holdings is currently generating about 0.04 per unit of volatility. If you would invest 2,065 in BANDAI NAMCO Holdings on October 12, 2024 and sell it today you would earn a total of 82.00 from holding BANDAI NAMCO Holdings or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
LPKF Laser Electronics vs. BANDAI NAMCO Holdings
Performance |
| Timeline |
| LPKF Laser Electronics |
| BANDAI NAMCO Holdings |
LPKF Laser and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and BANDAI NAMCO
The main advantage of trading using opposite LPKF Laser and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO's long position.| LPKF Laser vs. ecotel communication ag | LPKF Laser vs. Flutter Entertainment PLC | LPKF Laser vs. Highlight Communications AG | LPKF Laser vs. COMPUTERSHARE |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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