Correlation Between STHREE PLC and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both STHREE PLC 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 STHREE PLC and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STHREE PLC LS and LPKF Laser Electronics, you can compare the effects of market volatilities on STHREE PLC 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 STHREE PLC with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of STHREE PLC and LPKF Laser.
Diversification Opportunities for STHREE PLC and LPKF Laser
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STHREE and LPKF is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding STHREE PLC LS 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 STHREE PLC 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 STHREE PLC LS 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 STHREE PLC i.e., STHREE PLC and LPKF Laser go up and down completely randomly.
Pair Corralation between STHREE PLC and LPKF Laser
Assuming the 90 days horizon STHREE PLC LS is expected to generate 1.73 times more return on investment than LPKF Laser. However, STHREE PLC is 1.73 times more volatile than LPKF Laser Electronics. It trades about 0.0 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.16 per unit of risk. If you would invest 426.00 in STHREE PLC LS on August 30, 2024 and sell it today you would lose (1.00) from holding STHREE PLC LS or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STHREE PLC LS vs. LPKF Laser Electronics
Performance |
| Timeline |
| STHREE PLC LS |
| LPKF Laser Electronics |
STHREE PLC and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STHREE PLC and LPKF Laser
The main advantage of trading using opposite STHREE PLC and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STHREE PLC 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.| STHREE PLC vs. Recruit Holdings Co | STHREE PLC vs. Randstad NV | STHREE PLC vs. TRINET GROUP INC | STHREE PLC vs. TONGDAO LIEPGR DL 0001 |
| LPKF Laser vs. Lion One Metals | LPKF Laser vs. Gol Intelligent Airlines | LPKF Laser vs. Sunny Optical Technology | LPKF Laser vs. DXC Technology Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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