Correlation Between Artisan Partners and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Artisan Partners and IPG Photonics 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 Artisan Partners and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Partners Asset and IPG Photonics, you can compare the effects of market volatilities on Artisan Partners and IPG Photonics 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 Artisan Partners with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and IPG Photonics.
Diversification Opportunities for Artisan Partners and IPG Photonics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Artisan and IPG is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of Artisan Partners i.e., Artisan Partners and IPG Photonics go up and down completely randomly.
Pair Corralation between Artisan Partners and IPG Photonics
Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.79 times more return on investment than IPG Photonics. However, Artisan Partners Asset is 1.27 times less risky than IPG Photonics. It trades about -0.07 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.28 per unit of risk. If you would invest 4,305 in Artisan Partners Asset on November 27, 2024 and sell it today you would lose (98.00) from holding Artisan Partners Asset or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Partners Asset vs. IPG Photonics
Performance |
| Timeline |
| Artisan Partners Asset |
| IPG Photonics |
Artisan Partners and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Partners and IPG Photonics
The main advantage of trading using opposite Artisan Partners and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' long position.| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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