Correlation Between Laser Photonics and PVA TePla
Can any of the company-specific risk be diversified away by investing in both Laser Photonics and PVA TePla 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 Laser Photonics and PVA TePla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Photonics and PVA TePla AG, you can compare the effects of market volatilities on Laser Photonics and PVA TePla 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 Laser Photonics with a short position of PVA TePla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and PVA TePla.
Diversification Opportunities for Laser Photonics and PVA TePla
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Laser and PVA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics and PVA TePla AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVA TePla AG and Laser Photonics 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 Laser Photonics are associated (or correlated) with PVA TePla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVA TePla AG has no effect on the direction of Laser Photonics i.e., Laser Photonics and PVA TePla go up and down completely randomly.
Pair Corralation between Laser Photonics and PVA TePla
Given the investment horizon of 90 days Laser Photonics is expected to generate 1.96 times more return on investment than PVA TePla. However, Laser Photonics is 1.96 times more volatile than PVA TePla AG. It trades about 0.07 of its potential returns per unit of risk. PVA TePla AG is currently generating about 0.02 per unit of risk. If you would invest 214.00 in Laser Photonics on September 26, 2024 and sell it today you would earn a total of 335.00 from holding Laser Photonics or generate 156.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Laser Photonics vs. PVA TePla AG
Performance |
Timeline |
Laser Photonics |
PVA TePla AG |
Laser Photonics and PVA TePla Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laser Photonics and PVA TePla
The main advantage of trading using opposite Laser Photonics and PVA TePla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Photonics position performs unexpectedly, PVA TePla 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 PVA TePla will offset losses from the drop in PVA TePla's long position.Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
PVA TePla vs. Shapeways Holdings, Common | PVA TePla vs. JE Cleantech Holdings | PVA TePla vs. Greenland Acquisition Corp | PVA TePla vs. Laser Photonics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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