Correlation Between LPKF Laser and Trade Desk
Can any of the company-specific risk be diversified away by investing in both LPKF Laser and Trade Desk 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 LPKF Laser and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPKF Laser Electronics and The Trade Desk, you can compare the effects of market volatilities on LPKF Laser and Trade Desk 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 LPKF Laser with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPKF Laser and Trade Desk.
Diversification Opportunities for LPKF Laser and Trade Desk
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPKF and Trade is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LPKF Laser Electronics and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and LPKF Laser 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 LPKF Laser Electronics are associated (or correlated) with Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of LPKF Laser i.e., LPKF Laser and Trade Desk go up and down completely randomly.
Pair Corralation between LPKF Laser and Trade Desk
Assuming the 90 days horizon LPKF Laser Electronics is expected to generate 2.23 times more return on investment than Trade Desk. However, LPKF Laser is 2.23 times more volatile than The Trade Desk. It trades about 0.08 of its potential returns per unit of risk. The Trade Desk is currently generating about -0.09 per unit of risk. If you would invest 852.00 in LPKF Laser Electronics on September 27, 2024 and sell it today you would earn a total of 58.00 from holding LPKF Laser Electronics or generate 6.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LPKF Laser Electronics vs. The Trade Desk
Performance |
Timeline |
LPKF Laser Electronics |
Trade Desk |
LPKF Laser and Trade Desk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LPKF Laser and Trade Desk
The main advantage of trading using opposite LPKF Laser and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPKF Laser position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.LPKF Laser vs. Honeywell International | LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. 3M Company |
Trade Desk vs. STORE ELECTRONIC | Trade Desk vs. ARROW ELECTRONICS | Trade Desk vs. VIVA WINE GROUP | Trade Desk vs. LPKF Laser Electronics |
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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