Correlation Between Made Tech and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Made Tech 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 Made Tech and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and LPKF Laser Electronics, you can compare the effects of market volatilities on Made Tech 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 Made Tech with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and LPKF Laser.
Diversification Opportunities for Made Tech and LPKF Laser
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Made and LPKF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group 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 Made Tech 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 Made Tech Group 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 Made Tech i.e., Made Tech and LPKF Laser go up and down completely randomly.
Pair Corralation between Made Tech and LPKF Laser
Assuming the 90 days trading horizon Made Tech Group is expected to generate 2.11 times more return on investment than LPKF Laser. However, Made Tech is 2.11 times more volatile than LPKF Laser Electronics. It trades about 0.11 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.04 per unit of risk. If you would invest 1,538 in Made Tech Group on September 3, 2024 and sell it today you would earn a total of 762.00 from holding Made Tech Group or generate 49.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. LPKF Laser Electronics
Performance |
| Timeline |
| Made Tech Group |
| LPKF Laser Electronics |
Made Tech and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and LPKF Laser
The main advantage of trading using opposite Made Tech and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech 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.| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Hyundai Motor | Made Tech vs. Toyota Motor Corp |
| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. RTW Venture Fund | LPKF Laser vs. Secure Property Development |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |