Correlation Between IPG Photonics and Cartier Iron
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Cartier Iron 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 Cartier Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Cartier Iron Corp, you can compare the effects of market volatilities on IPG Photonics and Cartier Iron 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 Cartier Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Cartier Iron.
Diversification Opportunities for IPG Photonics and Cartier Iron
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPG and Cartier is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Cartier Iron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartier Iron 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 Cartier Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartier Iron Corp has no effect on the direction of IPG Photonics i.e., IPG Photonics and Cartier Iron go up and down completely randomly.
Pair Corralation between IPG Photonics and Cartier Iron
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Cartier Iron. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 5.48 times less risky than Cartier Iron. The stock trades about -0.07 of its potential returns per unit of risk. The Cartier Iron Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4.04 in Cartier Iron Corp on September 1, 2024 and sell it today you would earn a total of 1.46 from holding Cartier Iron Corp or generate 36.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
IPG Photonics vs. Cartier Iron Corp
Performance |
| Timeline |
| IPG Photonics |
| Cartier Iron Corp |
IPG Photonics and Cartier Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Cartier Iron
The main advantage of trading using opposite IPG Photonics and Cartier Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Cartier Iron 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 Cartier Iron will offset losses from the drop in Cartier Iron's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Cartier Iron vs. Merit Medical Systems | Cartier Iron vs. Boyd Gaming | Cartier Iron vs. GEN Restaurant Group, | Cartier Iron vs. Cardinal Health |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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