Correlation Between LPKF Laser and Renesas Electronics
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics, you can compare the effects of market volatilities on LPKF Laser and Renesas Electronics 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 Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Renesas Electronics.
Diversification Opportunities for LPKF Laser and Renesas Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Renesas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics 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 Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of LPKF Laser i.e., LPKF Laser and Renesas Electronics go up and down completely randomly.
Pair Corralation between LPKF Laser and Renesas Electronics
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Renesas Electronics. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.2 times less risky than Renesas Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Renesas Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Renesas Electronics on September 4, 2024 and sell it today you would earn a total of 264.00 from holding Renesas Electronics or generate 27.79% 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. Renesas Electronics
Performance |
| Timeline |
| LPKF Laser Electronics |
| Renesas Electronics |
LPKF Laser and Renesas Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Renesas Electronics
The main advantage of trading using opposite LPKF Laser and Renesas Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Renesas Electronics 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 Renesas Electronics will offset losses from the drop in Renesas Electronics' long position.| LPKF Laser vs. VIRG NATL BANKSH | LPKF Laser vs. WT OFFSHORE | LPKF Laser vs. Japan Tobacco | LPKF Laser vs. JAPAN TOBACCO UNSPADR12 |
| Renesas Electronics vs. NVIDIA | Renesas Electronics vs. Taiwan Semiconductor Manufacturing | Renesas Electronics vs. Advanced Micro Devices | Renesas Electronics vs. Intel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |