Correlation Between China Aircraft and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both China Aircraft 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 China Aircraft and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Aircraft Leasing and IPG Photonics, you can compare the effects of market volatilities on China Aircraft 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 China Aircraft with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and IPG Photonics.
Diversification Opportunities for China Aircraft and IPG Photonics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and IPG is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and China Aircraft 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 China Aircraft Leasing 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 China Aircraft i.e., China Aircraft and IPG Photonics go up and down completely randomly.
Pair Corralation between China Aircraft and IPG Photonics
If you would invest 40.00 in China Aircraft Leasing on September 12, 2024 and sell it today you would earn a total of 0.00 from holding China Aircraft Leasing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
China Aircraft Leasing vs. IPG Photonics
Performance |
| Timeline |
| China Aircraft Leasing |
| IPG Photonics |
China Aircraft and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and IPG Photonics
The main advantage of trading using opposite China Aircraft and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft 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.| China Aircraft vs. United Rentals | China Aircraft vs. Ashtead Gro | China Aircraft vs. AerCap Holdings NV | China Aircraft vs. Fortress Transp Infra |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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