Correlation Between LPKF Laser and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Ultra Clean 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 Ultra Clean 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 Ultra Clean Holdings, you can compare the effects of market volatilities on LPKF Laser and Ultra Clean 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 Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Ultra Clean.
Diversification Opportunities for LPKF Laser and Ultra Clean
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between LPKF and Ultra is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean 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 Ultra Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Clean Holdings has no effect on the direction of LPKF Laser i.e., LPKF Laser and Ultra Clean go up and down completely randomly.
Pair Corralation between LPKF Laser and Ultra Clean
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Ultra Clean. In addition to that, LPKF Laser is 2.11 times more volatile than Ultra Clean Holdings. It trades about -0.01 of its total potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.15 per unit of volatility. If you would invest 3,280 in Ultra Clean Holdings on September 15, 2024 and sell it today you would earn a total of 240.00 from holding Ultra Clean Holdings or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Ultra Clean Holdings
Performance |
| Timeline |
| LPKF Laser Electronics |
| Ultra Clean Holdings |
LPKF Laser and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Ultra Clean
The main advantage of trading using opposite LPKF Laser and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Ultra Clean 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 Ultra Clean will offset losses from the drop in Ultra Clean'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 |
| Ultra Clean vs. LPKF Laser Electronics | Ultra Clean vs. Renesas Electronics | Ultra Clean vs. UET United Electronic | Ultra Clean vs. MYFAIR GOLD P |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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