Correlation Between IPG Photonics and China Foods
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and China Foods 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 China Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and China Foods Limited, you can compare the effects of market volatilities on IPG Photonics and China Foods 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 China Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and China Foods.
Diversification Opportunities for IPG Photonics and China Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPG and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and China Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Foods Limited 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 China Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Foods Limited has no effect on the direction of IPG Photonics i.e., IPG Photonics and China Foods go up and down completely randomly.
Pair Corralation between IPG Photonics and China Foods
If you would invest 1.17 in China Foods Limited on September 3, 2024 and sell it today you would earn a total of 0.00 from holding China Foods Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.93% |
| Values | Daily Returns |
IPG Photonics vs. China Foods Limited
Performance |
| Timeline |
| IPG Photonics |
| China Foods Limited |
IPG Photonics and China Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and China Foods
The main advantage of trading using opposite IPG Photonics and China Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, China Foods 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 China Foods will offset losses from the drop in China Foods' long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| China Foods vs. Jacobs Solutions | China Foods vs. Skyline | China Foods vs. WEBTOON Entertainment Common | China Foods vs. Udemy Inc |
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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