Correlation Between Marks and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Marks and LPKF Laser 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 Marks and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marks and Spencer and LPKF Laser Electronics, you can compare the effects of market volatilities on Marks and LPKF Laser 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 Marks with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks and LPKF Laser.
Diversification Opportunities for Marks and LPKF Laser
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marks and LPKF is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Marks and Spencer and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics and Marks 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 Marks and Spencer are associated (or correlated) with LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Marks i.e., Marks and LPKF Laser go up and down completely randomly.
Pair Corralation between Marks and LPKF Laser
Assuming the 90 days trading horizon Marks and Spencer is expected to under-perform the LPKF Laser. In addition to that, Marks is 1.03 times more volatile than LPKF Laser Electronics. It trades about -0.31 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.29 per unit of volatility. If you would invest 820.00 in LPKF Laser Electronics on October 13, 2024 and sell it today you would earn a total of 111.00 from holding LPKF Laser Electronics or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marks and Spencer vs. LPKF Laser Electronics
Performance |
| Timeline |
| Marks and Spencer |
| LPKF Laser Electronics |
Marks and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marks and LPKF Laser
The main advantage of trading using opposite Marks and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marks position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Marks vs. LPKF Laser Electronics | Marks vs. Verizon Communications | Marks vs. Oxford Technology 2 | Marks vs. Charter Communications Cl |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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