Correlation Between LPKF Laser and PAX GLOBAL
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and PAX GLOBAL 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 PAX GLOBAL 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 PAX GLOBAL TECH, you can compare the effects of market volatilities on LPKF Laser and PAX GLOBAL 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 PAX GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and PAX GLOBAL.
Diversification Opportunities for LPKF Laser and PAX GLOBAL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LPKF and PAX is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and PAX GLOBAL TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX GLOBAL TECH 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 PAX GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX GLOBAL TECH has no effect on the direction of LPKF Laser i.e., LPKF Laser and PAX GLOBAL go up and down completely randomly.
Pair Corralation between LPKF Laser and PAX GLOBAL
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the PAX GLOBAL. In addition to that, LPKF Laser is 3.7 times more volatile than PAX GLOBAL TECH. It trades about -0.01 of its total potential returns per unit of risk. PAX GLOBAL TECH is currently generating about 0.12 per unit of volatility. If you would invest 60.00 in PAX GLOBAL TECH on September 12, 2024 and sell it today you would earn a total of 2.00 from holding PAX GLOBAL TECH or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LPKF Laser Electronics vs. PAX GLOBAL TECH
Performance |
| Timeline |
| LPKF Laser Electronics |
| PAX GLOBAL TECH |
LPKF Laser and PAX GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and PAX GLOBAL
The main advantage of trading using opposite LPKF Laser and PAX GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, PAX GLOBAL 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 PAX GLOBAL will offset losses from the drop in PAX GLOBAL's long position.| LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. SIVERS SEMICONDUCTORS AB | LPKF Laser vs. Norsk Hydro ASA |
| PAX GLOBAL vs. Western Copper and | PAX GLOBAL vs. Siamgas And Petrochemicals | PAX GLOBAL vs. Lion One Metals | PAX GLOBAL vs. AIR PRODCHEMICALS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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