Correlation Between LPKF Laser and DELTA AIR
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and DELTA AIR 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 DELTA AIR 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 DELTA AIR LINES, you can compare the effects of market volatilities on LPKF Laser and DELTA AIR 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 DELTA AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and DELTA AIR.
Diversification Opportunities for LPKF Laser and DELTA AIR
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and DELTA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and DELTA AIR LINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELTA AIR LINES 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 DELTA AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELTA AIR LINES has no effect on the direction of LPKF Laser i.e., LPKF Laser and DELTA AIR go up and down completely randomly.
Pair Corralation between LPKF Laser and DELTA AIR
Assuming the 90 days horizon LPKF Laser is expected to generate 2.25 times less return on investment than DELTA AIR. But when comparing it to its historical volatility, LPKF Laser Electronics is 1.47 times less risky than DELTA AIR. It trades about 0.14 of its potential returns per unit of risk. DELTA AIR LINES is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,767 in DELTA AIR LINES on October 17, 2024 and sell it today you would earn a total of 569.00 from holding DELTA AIR LINES or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. DELTA AIR LINES
Performance |
| Timeline |
| LPKF Laser Electronics |
| DELTA AIR LINES |
LPKF Laser and DELTA AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and DELTA AIR
The main advantage of trading using opposite LPKF Laser and DELTA AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, DELTA AIR 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 DELTA AIR will offset losses from the drop in DELTA AIR's long position.| LPKF Laser vs. Forsys Metals Corp | LPKF Laser vs. GRENKELEASING Dusseldorf | LPKF Laser vs. ZhongAn Online P | LPKF Laser vs. SERI INDUSTRIAL EO |
| DELTA AIR vs. De Grey Mining | DELTA AIR vs. LPKF Laser Electronics | DELTA AIR vs. Arrow Electronics | DELTA AIR vs. Endeavour Mining PLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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