Correlation Between IPG Photonics and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Agnico Eagle 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 IPG Photonics and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Agnico Eagle Mines, you can compare the effects of market volatilities on IPG Photonics and Agnico Eagle 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 IPG Photonics with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Agnico Eagle.
Diversification Opportunities for IPG Photonics and Agnico Eagle
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and Agnico is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines and IPG Photonics 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 IPG Photonics are associated (or correlated) with Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of IPG Photonics i.e., IPG Photonics and Agnico Eagle go up and down completely randomly.
Pair Corralation between IPG Photonics and Agnico Eagle
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Agnico Eagle. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 1.09 times less risky than Agnico Eagle. The stock trades about -0.14 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 8,824 in Agnico Eagle Mines on August 31, 2024 and sell it today you would lose (469.00) from holding Agnico Eagle Mines or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Agnico Eagle Mines
Performance |
| Timeline |
| IPG Photonics |
| Agnico Eagle Mines |
IPG Photonics and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Agnico Eagle
The main advantage of trading using opposite IPG Photonics and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Alamos Gold | Agnico Eagle vs. Seabridge Gold | Agnico Eagle vs. Osisko Gold Ro |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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