Correlation Between LPKF Laser and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Yanzhou Coal 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 Yanzhou Coal 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 Yanzhou Coal Mining, you can compare the effects of market volatilities on LPKF Laser and Yanzhou Coal 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 Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Yanzhou Coal.
Diversification Opportunities for LPKF Laser and Yanzhou Coal
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between LPKF and Yanzhou is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining 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 Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of LPKF Laser i.e., LPKF Laser and Yanzhou Coal go up and down completely randomly.
Pair Corralation between LPKF Laser and Yanzhou Coal
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 0.84 times more return on investment than Yanzhou Coal. However, LPKF Laser Electronics is 1.19 times less risky than Yanzhou Coal. It trades about 0.2 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.34 per unit of risk. If you would invest 874.00 in LPKF Laser Electronics on October 14, 2024 and sell it today you would earn a total of 52.00 from holding LPKF Laser Electronics or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPKF Laser Electronics vs. Yanzhou Coal Mining
Performance |
| Timeline |
| LPKF Laser Electronics |
| Yanzhou Coal Mining |
LPKF Laser and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Yanzhou Coal
The main advantage of trading using opposite LPKF Laser and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.| LPKF Laser vs. WisdomTree Investments | LPKF Laser vs. National Beverage Corp | LPKF Laser vs. Gladstone Investment | LPKF Laser vs. Japan Asia Investment |
| Yanzhou Coal vs. Richardson Electronics | Yanzhou Coal vs. Arrow Electronics | Yanzhou Coal vs. AOI Electronics Co | Yanzhou Coal vs. LPKF Laser Electronics |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |