Correlation Between IPG Photonics and AudioCodes
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and AudioCodes 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 AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and AudioCodes, you can compare the effects of market volatilities on IPG Photonics and AudioCodes 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 AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and AudioCodes.
Diversification Opportunities for IPG Photonics and AudioCodes
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPG and AudioCodes is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes 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 AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of IPG Photonics i.e., IPG Photonics and AudioCodes go up and down completely randomly.
Pair Corralation between IPG Photonics and AudioCodes
Given the investment horizon of 90 days IPG Photonics is expected to generate 0.73 times more return on investment than AudioCodes. However, IPG Photonics is 1.36 times less risky than AudioCodes. It trades about 0.07 of its potential returns per unit of risk. AudioCodes is currently generating about -0.03 per unit of risk. If you would invest 7,476 in IPG Photonics on August 24, 2024 and sell it today you would earn a total of 303.00 from holding IPG Photonics or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. AudioCodes
Performance |
| Timeline |
| IPG Photonics |
| AudioCodes |
IPG Photonics and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and AudioCodes
The main advantage of trading using opposite IPG Photonics and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| IPG Photonics vs. Cohu Inc | IPG Photonics vs. Entegris | IPG Photonics vs. Veeco Instruments | IPG Photonics vs. Ultra Clean Holdings |
| AudioCodes vs. Aviat Networks | AudioCodes vs. Silicom | AudioCodes vs. Akoustis Technologies | AudioCodes vs. Gilat Satellite Networks |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |