Correlation Between IPG Photonics and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Amtech Systems 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 Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Amtech Systems, you can compare the effects of market volatilities on IPG Photonics and Amtech Systems 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 Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Amtech Systems.
Diversification Opportunities for IPG Photonics and Amtech Systems
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPG and Amtech is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of IPG Photonics i.e., IPG Photonics and Amtech Systems go up and down completely randomly.
Pair Corralation between IPG Photonics and Amtech Systems
Given the investment horizon of 90 days IPG Photonics is expected to generate 8.4 times less return on investment than Amtech Systems. In addition to that, IPG Photonics is 1.64 times more volatile than Amtech Systems. It trades about 0.01 of its total potential returns per unit of risk. Amtech Systems is currently generating about 0.08 per unit of volatility. If you would invest 574.00 in Amtech Systems on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Amtech Systems or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Amtech Systems
Performance |
| Timeline |
| IPG Photonics |
| Amtech Systems |
IPG Photonics and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Amtech Systems
The main advantage of trading using opposite IPG Photonics and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Amtech Systems 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 Amtech Systems will offset losses from the drop in Amtech Systems' long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
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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