Correlation Between IPG Photonics and Asure Software
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Asure Software 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 Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Asure Software, you can compare the effects of market volatilities on IPG Photonics and Asure Software 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 Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Asure Software.
Diversification Opportunities for IPG Photonics and Asure Software
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPG and Asure is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software 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 Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of IPG Photonics i.e., IPG Photonics and Asure Software go up and down completely randomly.
Pair Corralation between IPG Photonics and Asure Software
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Asure Software. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 1.84 times less risky than Asure Software. The stock trades about -0.01 of its potential returns per unit of risk. The Asure Software is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 910.00 in Asure Software on October 23, 2024 and sell it today you would earn a total of 304.00 from holding Asure Software or generate 33.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Asure Software
Performance |
| Timeline |
| IPG Photonics |
| Asure Software |
IPG Photonics and Asure Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Asure Software
The main advantage of trading using opposite IPG Photonics and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Asure Software vs. Alkami Technology | Asure Software vs. Blackbaud | Asure Software vs. Enfusion | Asure Software vs. Clearwater Analytics Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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