Correlation Between Evertz Technologies and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Evertz Technologies 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 Evertz Technologies and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evertz Technologies Limited and IPG Photonics, you can compare the effects of market volatilities on Evertz Technologies 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 Evertz Technologies with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and IPG Photonics.
Diversification Opportunities for Evertz Technologies and IPG Photonics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evertz and IPG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Evertz Technologies 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 Evertz Technologies Limited 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 Evertz Technologies i.e., Evertz Technologies and IPG Photonics go up and down completely randomly.
Pair Corralation between Evertz Technologies and IPG Photonics
Assuming the 90 days horizon Evertz Technologies Limited is expected to generate 1.12 times more return on investment than IPG Photonics. However, Evertz Technologies is 1.12 times more volatile than IPG Photonics. It trades about -0.01 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.05 per unit of risk. If you would invest 1,005 in Evertz Technologies Limited on September 12, 2024 and sell it today you would lose (115.00) from holding Evertz Technologies Limited or give up 11.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.66% |
| Values | Daily Returns |
Evertz Technologies Limited vs. IPG Photonics
Performance |
| Timeline |
| Evertz Technologies |
| IPG Photonics |
Evertz Technologies and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evertz Technologies and IPG Photonics
The main advantage of trading using opposite Evertz Technologies and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertz Technologies 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.| Evertz Technologies vs. Boxlight Corp Class | Evertz Technologies vs. Siyata Mobile | Evertz Technologies vs. ClearOne |
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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 the Stocks Directory module to find actively traded stocks across global markets.
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