Correlation Between LPKF Laser and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH, you can compare the effects of market volatilities on LPKF Laser and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and OPKO HEALTH.
Diversification Opportunities for LPKF Laser and OPKO HEALTH
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and OPKO is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of LPKF Laser i.e., LPKF Laser and OPKO HEALTH go up and down completely randomly.
Pair Corralation between LPKF Laser and OPKO HEALTH
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the OPKO HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, LPKF Laser Electronics is 1.06 times less risky than OPKO HEALTH. The stock trades about -0.01 of its potential returns per unit of risk. The OPKO HEALTH is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 119.00 in OPKO HEALTH on November 5, 2024 and sell it today you would earn a total of 24.00 from holding OPKO HEALTH or generate 20.17% 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. OPKO HEALTH
Performance |
| Timeline |
| LPKF Laser Electronics |
| OPKO HEALTH |
LPKF Laser and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and OPKO HEALTH
The main advantage of trading using opposite LPKF Laser and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| LPKF Laser vs. Keck Seng Investments | LPKF Laser vs. REINET INVESTMENTS SCA | LPKF Laser vs. Apollo Investment Corp | LPKF Laser vs. HK Electric Investments |
| OPKO HEALTH vs. UNIVERSAL MUSIC GROUP | OPKO HEALTH vs. SOLSTAD OFFSHORE NK | OPKO HEALTH vs. MOVIE GAMES SA | OPKO HEALTH vs. Altair Engineering |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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