Correlation Between Prosiebensat and LPKF Laser

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

By analyzing existing cross correlation between Prosiebensat 1 Media and LPKF Laser Electronics, you can compare the effects of market volatilities on Prosiebensat 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 Prosiebensat with a short position of LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and LPKF Laser.

Diversification Opportunities for Prosiebensat and LPKF Laser

0.28

Correlation Coefficient

Prosiebensat  LPKF Laser

Modest diversification

The 3 months correlation between Prosiebensat and LPKF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media 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 Prosiebensat 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 Prosiebensat 1 Media 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 Prosiebensat i.e., Prosiebensat and LPKF Laser go up and down completely randomly.

Pair Corralation between Prosiebensat and LPKF Laser

Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 1.11 times more return on investment than LPKF Laser. However, Prosiebensat is 1.11 times more volatile than LPKF Laser Electronics. It trades about 0.12 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.06 per unit of risk. If you would invest  601.00  in Prosiebensat 1 Media on April 20, 2025 and sell it today you would earn a total of  122.00  from holding Prosiebensat 1 Media or generate 20.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Prosiebensat 1 Media  vs.  LPKF Laser Electronics

Prosiebensat 1 Media

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Prosiebensat 1 Media are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Prosiebensat unveiled solid returns over the last few months and may actually be approaching a breakup point.

LPKF Laser Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LPKF Laser Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, LPKF Laser may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Prosiebensat and LPKF Laser

The main advantage of trading using opposite Prosiebensat and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat 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.

The idea behind Prosiebensat 1 Media and LPKF Laser Electronics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..