Correlation Between Various Eateries and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Various Eateries 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 Various Eateries and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Various Eateries PLC and LPKF Laser Electronics, you can compare the effects of market volatilities on Various Eateries 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 Various Eateries with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Various Eateries and LPKF Laser.
Diversification Opportunities for Various Eateries and LPKF Laser
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Various and LPKF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Various Eateries PLC 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 Various Eateries 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 Various Eateries PLC 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 Various Eateries i.e., Various Eateries and LPKF Laser go up and down completely randomly.
Pair Corralation between Various Eateries and LPKF Laser
Assuming the 90 days trading horizon Various Eateries PLC is expected to generate 0.53 times more return on investment than LPKF Laser. However, Various Eateries PLC is 1.9 times less risky than LPKF Laser. It trades about 0.22 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 1,775 in Various Eateries PLC on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Various Eateries PLC or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Various Eateries PLC vs. LPKF Laser Electronics
Performance |
| Timeline |
| Various Eateries PLC |
| LPKF Laser Electronics |
Various Eateries and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Various Eateries and LPKF Laser
The main advantage of trading using opposite Various Eateries and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Various Eateries 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.| Various Eateries vs. Rockfire Resources plc | Various Eateries vs. Tlou Energy | Various Eateries vs. Falcon Oil Gas | Various Eateries vs. Helium One Global |
| LPKF Laser vs. Catalyst Media Group | LPKF Laser vs. CATLIN GROUP | LPKF Laser vs. Magnora ASA | LPKF Laser vs. RTW Venture Fund |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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