Correlation Between LPKF Laser and Unity Software
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Unity Software 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 Unity Software 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 Unity Software, you can compare the effects of market volatilities on LPKF Laser and Unity Software 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 Unity Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Unity Software.
Diversification Opportunities for LPKF Laser and Unity Software
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPKF and Unity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of LPKF Laser i.e., LPKF Laser and Unity Software go up and down completely randomly.
Pair Corralation between LPKF Laser and Unity Software
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.68 times more return on investment than Unity Software. However, LPKF Laser Electronics is 1.47 times less risky than Unity Software. It trades about 0.01 of its potential returns per unit of risk. Unity Software is currently generating about -0.01 per unit of risk. If you would invest 890.00 in LPKF Laser Electronics on August 31, 2024 and sell it today you would lose (30.00) from holding LPKF Laser Electronics or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Unity Software
Performance |
| Timeline |
| LPKF Laser Electronics |
| Unity Software |
LPKF Laser and Unity Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Unity Software
The main advantage of trading using opposite LPKF Laser and Unity Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Unity Software 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 Unity Software will offset losses from the drop in Unity Software's long position.| LPKF Laser vs. ABB | LPKF Laser vs. Emerson Electric Co | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. NMI Holdings |
| Unity Software vs. National Retail Properties | Unity Software vs. CHINA TONTINE WINES | Unity Software vs. MINCO SILVER | Unity Software vs. Calibre Mining Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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