Correlation Between LPKF Laser and Wacker Neuson
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Wacker Neuson 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 Wacker Neuson 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 Wacker Neuson SE, you can compare the effects of market volatilities on LPKF Laser and Wacker Neuson 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 Wacker Neuson. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Wacker Neuson.
Diversification Opportunities for LPKF Laser and Wacker Neuson
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LPKF and Wacker is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Wacker Neuson SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wacker Neuson SE 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 Wacker Neuson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wacker Neuson SE has no effect on the direction of LPKF Laser i.e., LPKF Laser and Wacker Neuson go up and down completely randomly.
Pair Corralation between LPKF Laser and Wacker Neuson
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the Wacker Neuson. In addition to that, LPKF Laser is 2.48 times more volatile than Wacker Neuson SE. It trades about 0.0 of its total potential returns per unit of risk. Wacker Neuson SE is currently generating about 0.14 per unit of volatility. If you would invest 1,362 in Wacker Neuson SE on September 13, 2024 and sell it today you would earn a total of 84.00 from holding Wacker Neuson SE or generate 6.17% 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. Wacker Neuson SE
Performance |
| Timeline |
| LPKF Laser Electronics |
| Wacker Neuson SE |
LPKF Laser and Wacker Neuson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Wacker Neuson
The main advantage of trading using opposite LPKF Laser and Wacker Neuson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Wacker Neuson 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 Wacker Neuson will offset losses from the drop in Wacker Neuson'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 |
| Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc |
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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