Correlation Between IPG Photonics and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Apogee Enterprises 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 Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Apogee Enterprises, you can compare the effects of market volatilities on IPG Photonics and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Apogee Enterprises.
Diversification Opportunities for IPG Photonics and Apogee Enterprises
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IPG and Apogee is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of IPG Photonics i.e., IPG Photonics and Apogee Enterprises go up and down completely randomly.
Pair Corralation between IPG Photonics and Apogee Enterprises
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Apogee Enterprises. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 1.07 times less risky than Apogee Enterprises. The stock trades about -0.03 of its potential returns per unit of risk. The Apogee Enterprises is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,388 in Apogee Enterprises on August 24, 2024 and sell it today you would earn a total of 3,888 from holding Apogee Enterprises or generate 88.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
IPG Photonics vs. Apogee Enterprises
Performance |
| Timeline |
| IPG Photonics |
| Apogee Enterprises |
IPG Photonics and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Apogee Enterprises
The main advantage of trading using opposite IPG Photonics and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| IPG Photonics vs. Cohu Inc | IPG Photonics vs. Entegris | IPG Photonics vs. Veeco Instruments | IPG Photonics vs. Ultra Clean Holdings |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |