Correlation Between LPKF Laser and WillScot Mobile
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and WillScot Mobile 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 WillScot Mobile 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 WillScot Mobile Mini, you can compare the effects of market volatilities on LPKF Laser and WillScot Mobile 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 WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and WillScot Mobile.
Diversification Opportunities for LPKF Laser and WillScot Mobile
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and WillScot is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini 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 WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of LPKF Laser i.e., LPKF Laser and WillScot Mobile go up and down completely randomly.
Pair Corralation between LPKF Laser and WillScot Mobile
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.89 times more return on investment than WillScot Mobile. However, LPKF Laser Electronics is 1.12 times less risky than WillScot Mobile. It trades about 0.06 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 781.00 in LPKF Laser Electronics on October 19, 2024 and sell it today you would earn a total of 131.00 from holding LPKF Laser Electronics or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. WillScot Mobile Mini
Performance |
| Timeline |
| LPKF Laser Electronics |
| WillScot Mobile Mini |
LPKF Laser and WillScot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and WillScot Mobile
The main advantage of trading using opposite LPKF Laser and WillScot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, WillScot Mobile 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 WillScot Mobile will offset losses from the drop in WillScot Mobile's long position.| LPKF Laser vs. The Home Depot | LPKF Laser vs. DFS Furniture PLC | LPKF Laser vs. Xenia Hotels Resorts | LPKF Laser vs. KENEDIX OFFICE INV |
| WillScot Mobile vs. Eidesvik Offshore ASA | WillScot Mobile vs. Altair Engineering | WillScot Mobile vs. SEALED AIR | WillScot Mobile vs. HEMISPHERE EGY |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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