Correlation Between Weiss Korea and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Weiss Korea 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 Weiss Korea and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weiss Korea Opportunity and LPKF Laser Electronics, you can compare the effects of market volatilities on Weiss Korea 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 Weiss Korea with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weiss Korea and LPKF Laser.
Diversification Opportunities for Weiss Korea and LPKF Laser
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weiss and LPKF is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity 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 Weiss Korea 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 Weiss Korea Opportunity 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 Weiss Korea i.e., Weiss Korea and LPKF Laser go up and down completely randomly.
Pair Corralation between Weiss Korea and LPKF Laser
Assuming the 90 days trading horizon Weiss Korea is expected to generate 2.16 times less return on investment than LPKF Laser. In addition to that, Weiss Korea is 1.36 times more volatile than LPKF Laser Electronics. It trades about 0.01 of its total potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.02 per unit of volatility. If you would invest 882.00 in LPKF Laser Electronics on October 6, 2024 and sell it today you would earn a total of 7.00 from holding LPKF Laser Electronics or generate 0.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Weiss Korea Opportunity vs. LPKF Laser Electronics
Performance |
Timeline |
Weiss Korea Opportunity |
LPKF Laser Electronics |
Weiss Korea and LPKF Laser Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weiss Korea and LPKF Laser
The main advantage of trading using opposite Weiss Korea and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea 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.Weiss Korea vs. Monster Beverage Corp | Weiss Korea vs. Zoom Video Communications | Weiss Korea vs. Auto Trader Group | Weiss Korea vs. Mindflair Plc |
LPKF Laser vs. United Airlines Holdings | LPKF Laser vs. Ion Beam Applications | LPKF Laser vs. British American Tobacco | LPKF Laser vs. Broadridge Financial Solutions |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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