Correlation Between LPKF Laser and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on LPKF Laser and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Zurich Insurance.
Diversification Opportunities for LPKF Laser and Zurich Insurance
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Zurich is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of LPKF Laser i.e., LPKF Laser and Zurich Insurance go up and down completely randomly.
Pair Corralation between LPKF Laser and Zurich Insurance
Assuming the 90 days horizon LPKF Laser is expected to generate 2.15 times less return on investment than Zurich Insurance. In addition to that, LPKF Laser is 1.36 times more volatile than Zurich Insurance Group. It trades about 0.02 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.07 per unit of volatility. If you would invest 2,175 in Zurich Insurance Group on November 1, 2024 and sell it today you would earn a total of 685.00 from holding Zurich Insurance Group or generate 31.49% 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. Zurich Insurance Group
Performance |
| Timeline |
| LPKF Laser Electronics |
| Zurich Insurance |
LPKF Laser and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPKF Laser and Zurich Insurance
The main advantage of trading using opposite LPKF Laser and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| LPKF Laser vs. TELECOM ITALIA | LPKF Laser vs. TERADATA | LPKF Laser vs. COMBA TELECOM SYST | LPKF Laser vs. DATAGROUP SE |
| Zurich Insurance vs. CARSALESCOM | Zurich Insurance vs. Fast Retailing Co | Zurich Insurance vs. FLOW TRADERS LTD | Zurich Insurance vs. TRADELINK ELECTRON |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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