Correlation Between Lasertec and Perficient

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Can any of the company-specific risk be diversified away by investing in both Lasertec and Perficient 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 Lasertec and Perficient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lasertec and Perficient, you can compare the effects of market volatilities on Lasertec and Perficient 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 Lasertec with a short position of Perficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and Perficient.

Diversification Opportunities for Lasertec and Perficient

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Lasertec and Perficient is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient and Lasertec 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 Lasertec are associated (or correlated) with Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of Lasertec i.e., Lasertec and Perficient go up and down completely randomly.

Pair Corralation between Lasertec and Perficient

Assuming the 90 days horizon Lasertec is expected to generate 2.26 times more return on investment than Perficient. However, Lasertec is 2.26 times more volatile than Perficient. It trades about 0.24 of its potential returns per unit of risk. Perficient is currently generating about 0.17 per unit of risk. If you would invest  14,050  in Lasertec on September 6, 2022 and sell it today you would earn a total of  4,650  from holding Lasertec or generate 33.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Lasertec  vs.  Perficient

 Performance (%) 
       Timeline  
Lasertec 
Lasertec Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Lasertec are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Lasertec exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lasertec Price Channel

Perficient 
Perficient Performance
0 of 100
Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Perficient is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Perficient Price Channel

Lasertec and Perficient Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lasertec and Perficient

The main advantage of trading using opposite Lasertec and Perficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec position performs unexpectedly, Perficient 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 Perficient will offset losses from the drop in Perficient's long position.
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The idea behind Lasertec and Perficient 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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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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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