Correlation Between LPKF Laser and Bio Techne
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Bio Techne 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 Bio Techne 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 Bio Techne Corp, you can compare the effects of market volatilities on LPKF Laser and Bio Techne 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 Bio Techne. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Bio Techne.
Diversification Opportunities for LPKF Laser and Bio Techne
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Bio is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne Corp 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 Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of LPKF Laser i.e., LPKF Laser and Bio Techne go up and down completely randomly.
Pair Corralation between LPKF Laser and Bio Techne
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 1.26 times more return on investment than Bio Techne. However, LPKF Laser is 1.26 times more volatile than Bio Techne Corp. It trades about 0.05 of its potential returns per unit of risk. Bio Techne Corp is currently generating about 0.01 per unit of risk. If you would invest 800.00 in LPKF Laser Electronics on October 26, 2024 and sell it today you would earn a total of 100.00 from holding LPKF Laser Electronics or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Bio Techne Corp
Performance |
| Timeline |
| LPKF Laser Electronics |
| Bio Techne Corp |
LPKF Laser and Bio Techne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Bio Techne
The main advantage of trading using opposite LPKF Laser and Bio Techne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Bio Techne 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 Bio Techne will offset losses from the drop in Bio Techne's long position.| LPKF Laser vs. Honeywell International | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. Eaton PLC | LPKF Laser vs. ABB |
| Bio Techne vs. Benchmark Electronics | Bio Techne vs. LPKF Laser Electronics | Bio Techne vs. SCANDMEDICAL SOLDK 040 | Bio Techne vs. Inspire Medical Systems |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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