Correlation Between LPKF Laser and Wizz Air
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on LPKF Laser and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Wizz Air.
Diversification Opportunities for LPKF Laser and Wizz Air
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and Wizz is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of LPKF Laser i.e., LPKF Laser and Wizz Air go up and down completely randomly.
Pair Corralation between LPKF Laser and Wizz Air
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.44 times more return on investment than Wizz Air. However, LPKF Laser Electronics is 2.26 times less risky than Wizz Air. It trades about -0.02 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.1 per unit of risk. If you would invest 876.00 in LPKF Laser Electronics on November 6, 2024 and sell it today you would lose (6.00) from holding LPKF Laser Electronics or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Wizz Air Holdings
Performance |
| Timeline |
| LPKF Laser Electronics |
| Wizz Air Holdings |
LPKF Laser and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Wizz Air
The main advantage of trading using opposite LPKF Laser and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.| LPKF Laser vs. Honeywell International | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. ABB | LPKF Laser vs. Parker Hannifin |
| Wizz Air vs. Nexstar Media Group | Wizz Air vs. RCS MediaGroup SpA | Wizz Air vs. Townsquare Media | Wizz Air vs. Mitsubishi Gas Chemical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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