Correlation Between IPG Photonics and Altimar Acquisition
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Altimar Acquisition 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 Altimar Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Altimar Acquisition Corp, you can compare the effects of market volatilities on IPG Photonics and Altimar Acquisition 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 Altimar Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Altimar Acquisition.
Diversification Opportunities for IPG Photonics and Altimar Acquisition
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPG and Altimar is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp 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 Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of IPG Photonics i.e., IPG Photonics and Altimar Acquisition go up and down completely randomly.
Pair Corralation between IPG Photonics and Altimar Acquisition
Given the investment horizon of 90 days IPG Photonics is expected to generate 48244.36 times less return on investment than Altimar Acquisition. But when comparing it to its historical volatility, IPG Photonics is 120.83 times less risky than Altimar Acquisition. It trades about 0.0 of its potential returns per unit of risk. Altimar Acquisition Corp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Altimar Acquisition Corp on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Altimar Acquisition Corp or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.45% |
| Values | Daily Returns |
IPG Photonics vs. Altimar Acquisition Corp
Performance |
| Timeline |
| IPG Photonics |
| Altimar Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IPG Photonics and Altimar Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Altimar Acquisition
The main advantage of trading using opposite IPG Photonics and Altimar Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Altimar Acquisition 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 Altimar Acquisition will offset losses from the drop in Altimar Acquisition's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Altimar Acquisition vs. Analog Devices | Altimar Acquisition vs. Western Digital | Altimar Acquisition vs. Arq Inc | Altimar Acquisition vs. Uber Technologies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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