Correlation Between LPKF Laser and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA, you can compare the effects of market volatilities on LPKF Laser and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and ATRESMEDIA.
Diversification Opportunities for LPKF Laser and ATRESMEDIA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between LPKF and ATRESMEDIA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of LPKF Laser i.e., LPKF Laser and ATRESMEDIA go up and down completely randomly.
Pair Corralation between LPKF Laser and ATRESMEDIA
Assuming the 90 days horizon LPKF Laser Electronics is expected to under-perform the ATRESMEDIA. In addition to that, LPKF Laser is 1.95 times more volatile than ATRESMEDIA. It trades about -0.01 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.08 per unit of volatility. If you would invest 277.00 in ATRESMEDIA on November 7, 2024 and sell it today you would earn a total of 170.00 from holding ATRESMEDIA or generate 61.37% 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. ATRESMEDIA
Performance |
| Timeline |
| LPKF Laser Electronics |
| ATRESMEDIA |
LPKF Laser and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and ATRESMEDIA
The main advantage of trading using opposite LPKF Laser and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| LPKF Laser vs. Honeywell International | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. ABB | LPKF Laser vs. Parker Hannifin |
| ATRESMEDIA vs. Mitsubishi Gas Chemical | ATRESMEDIA vs. TRI CHEMICAL LABORATINC | ATRESMEDIA vs. Sanyo Chemical Industries | ATRESMEDIA vs. Aedas Homes SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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