Correlation Between Huabao International and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Huabao International 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 Huabao International and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huabao International Holdings and IPG Photonics, you can compare the effects of market volatilities on Huabao International 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 Huabao International with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huabao International and IPG Photonics.
Diversification Opportunities for Huabao International and IPG Photonics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huabao and IPG is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Huabao International Holdings and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Huabao International 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 Huabao International Holdings 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 Huabao International i.e., Huabao International and IPG Photonics go up and down completely randomly.
Pair Corralation between Huabao International and IPG Photonics
If you would invest 7,833 in IPG Photonics on September 13, 2024 and sell it today you would lose (21.00) from holding IPG Photonics or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Huabao International Holdings vs. IPG Photonics
Performance |
| Timeline |
| Huabao International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IPG Photonics |
Huabao International and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huabao International and IPG Photonics
The main advantage of trading using opposite Huabao International and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huabao International 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.| Huabao International vs. Getty Copper | Huabao International vs. Vestis | Huabao International vs. Highway Holdings Limited | Huabao International vs. Bright Scholar Education |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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