Correlation Between MAHLE Metal and Lam Research

Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Lam Research 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 MAHLE Metal and Lam Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAHLE Metal Leve and Lam Research, you can compare the effects of market volatilities on MAHLE Metal and Lam Research 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 MAHLE Metal with a short position of Lam Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Lam Research.

Diversification Opportunities for MAHLE Metal and Lam Research

0.0

Correlation Coefficient

MAHLE Metal  Lam Research

Pay attention - limited upside

The 3 months correlation between MAHLE and Lam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Lam Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Research and MAHLE Metal 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 MAHLE Metal Leve are associated (or correlated) with Lam Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Research has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Lam Research go up and down completely randomly.

Pair Corralation between MAHLE Metal and Lam Research

If you would invest (100.00) in Lam Research on October 8, 2024 and sell it today you would earn a total of  100.00  from holding Lam Research or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MAHLE Metal Leve  vs.  Lam Research

MAHLE Metal Leve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Lam Research

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Lam Research has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lam Research is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MAHLE Metal and Lam Research

The main advantage of trading using opposite MAHLE Metal and Lam Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Lam Research 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 Lam Research will offset losses from the drop in Lam Research's long position.

The idea behind MAHLE Metal Leve and Lam Research pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.