Correlation Between Progressive Corp and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Progressive Corp 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 Progressive Corp and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and LPKF Laser Electronics, you can compare the effects of market volatilities on Progressive Corp 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 Progressive Corp with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and LPKF Laser.
Diversification Opportunities for Progressive Corp and LPKF Laser
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Progressive and LPKF is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp 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 Progressive Corp 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 Progressive Corp 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 Progressive Corp i.e., Progressive Corp and LPKF Laser go up and down completely randomly.
Pair Corralation between Progressive Corp and LPKF Laser
Assuming the 90 days horizon Progressive Corp is expected to generate 1.23 times more return on investment than LPKF Laser. However, Progressive Corp is 1.23 times more volatile than LPKF Laser Electronics. It trades about 0.12 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 4,585 in Progressive Corp on September 2, 2024 and sell it today you would earn a total of 1,815 from holding Progressive Corp or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. LPKF Laser Electronics
Performance |
| Timeline |
| Progressive Corp |
| LPKF Laser Electronics |
Progressive Corp and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and LPKF Laser
The main advantage of trading using opposite Progressive Corp and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp 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.| Progressive Corp vs. Adtalem Global Education | Progressive Corp vs. CNVISION MEDIA | Progressive Corp vs. Dave Busters Entertainment | Progressive Corp vs. WILLIS LEASE FIN |
| LPKF Laser vs. SBA Communications Corp | LPKF Laser vs. AIR PRODCHEMICALS | LPKF Laser vs. Sterling Construction | LPKF Laser vs. DAIRY FARM INTL |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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