Correlation Between THORNEY TECHS and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS 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 THORNEY TECHS and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and LPKF Laser Electronics, you can compare the effects of market volatilities on THORNEY TECHS 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 THORNEY TECHS with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and LPKF Laser.
Diversification Opportunities for THORNEY TECHS and LPKF Laser
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THORNEY and LPKF is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD 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 THORNEY TECHS 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 THORNEY TECHS LTD 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 THORNEY TECHS i.e., THORNEY TECHS and LPKF Laser go up and down completely randomly.
Pair Corralation between THORNEY TECHS and LPKF Laser
Assuming the 90 days horizon THORNEY TECHS LTD is expected to generate 1.97 times more return on investment than LPKF Laser. However, THORNEY TECHS is 1.97 times more volatile than LPKF Laser Electronics. It trades about 0.02 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.0 per unit of risk. If you would invest 8.55 in THORNEY TECHS LTD on September 14, 2024 and sell it today you would lose (0.95) from holding THORNEY TECHS LTD or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. LPKF Laser Electronics
Performance |
| Timeline |
| THORNEY TECHS LTD |
| LPKF Laser Electronics |
THORNEY TECHS and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and LPKF Laser
The main advantage of trading using opposite THORNEY TECHS and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS 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.| THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
| LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. SIVERS SEMICONDUCTORS AB | LPKF Laser vs. Norsk Hydro ASA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |