Correlation Between IPG Photonics and Artisan Partners
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Artisan Partners 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 Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Artisan Partners Asset, you can compare the effects of market volatilities on IPG Photonics and Artisan Partners 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 Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Artisan Partners.
Diversification Opportunities for IPG Photonics and Artisan Partners
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IPG and Artisan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset 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 Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of IPG Photonics i.e., IPG Photonics and Artisan Partners go up and down completely randomly.
Pair Corralation between IPG Photonics and Artisan Partners
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Artisan Partners. In addition to that, IPG Photonics is 1.27 times more volatile than Artisan Partners Asset. It trades about -0.28 of its total potential returns per unit of risk. Artisan Partners Asset is currently generating about -0.07 per unit of volatility. 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 |
IPG Photonics vs. Artisan Partners Asset
Performance |
| Timeline |
| IPG Photonics |
| Artisan Partners Asset |
IPG Photonics and Artisan Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Artisan Partners
The main advantage of trading using opposite IPG Photonics and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Artisan Partners 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 Artisan Partners will offset losses from the drop in Artisan Partners' long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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