Correlation Between IPG Photonics and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and CapitaLand Investment 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 CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and CapitaLand Investment Limited, you can compare the effects of market volatilities on IPG Photonics and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and CapitaLand Investment.
Diversification Opportunities for IPG Photonics and CapitaLand Investment
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and CapitaLand is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of IPG Photonics i.e., IPG Photonics and CapitaLand Investment go up and down completely randomly.
Pair Corralation between IPG Photonics and CapitaLand Investment
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the CapitaLand Investment. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 2.02 times less risky than CapitaLand Investment. The stock trades about -0.05 of its potential returns per unit of risk. The CapitaLand Investment Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 243.00 in CapitaLand Investment Limited on December 4, 2024 and sell it today you would lose (76.00) from holding CapitaLand Investment Limited or give up 31.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
IPG Photonics vs. CapitaLand Investment Limited
Performance |
| Timeline |
| IPG Photonics |
| CapitaLand Investment |
IPG Photonics and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and CapitaLand Investment
The main advantage of trading using opposite IPG Photonics and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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