Correlation Between European Metals and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and LPKF Laser Electronics, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and LPKF Laser.
Diversification Opportunities for European Metals and LPKF Laser
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between European and LPKF is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and LPKF Laser go up and down completely randomly.
Pair Corralation between European Metals and LPKF Laser
Assuming the 90 days trading horizon European Metals Holdings is expected to generate 4.68 times more return on investment than LPKF Laser. However, European Metals is 4.68 times more volatile than LPKF Laser Electronics. It trades about 0.17 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.2 per unit of risk. If you would invest 875.00 in European Metals Holdings on September 10, 2025 and sell it today you would earn a total of 1,175 from holding European Metals Holdings or generate 134.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. LPKF Laser Electronics
Performance |
| Timeline |
| European Metals Holdings |
| LPKF Laser Electronics |
European Metals and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and LPKF Laser
The main advantage of trading using opposite European Metals and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Clariant AG | European Metals vs. EVRAZ plc |
| LPKF Laser vs. Abeona Therapeutics | LPKF Laser vs. Roadside Real Estate | LPKF Laser vs. Power Metal Resources | LPKF Laser vs. Tamburi Investment Partners |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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