Correlation Between IPG Photonics and Doubledown Interactive
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Doubledown Interactive 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 Doubledown Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Doubledown Interactive Co, you can compare the effects of market volatilities on IPG Photonics and Doubledown Interactive 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 Doubledown Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Doubledown Interactive.
Diversification Opportunities for IPG Photonics and Doubledown Interactive
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and Doubledown is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Doubledown Interactive Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown Interactive 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 Doubledown Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown Interactive has no effect on the direction of IPG Photonics i.e., IPG Photonics and Doubledown Interactive go up and down completely randomly.
Pair Corralation between IPG Photonics and Doubledown Interactive
Given the investment horizon of 90 days IPG Photonics is expected to generate 0.85 times more return on investment than Doubledown Interactive. However, IPG Photonics is 1.17 times less risky than Doubledown Interactive. It trades about 0.01 of its potential returns per unit of risk. Doubledown Interactive Co is currently generating about -0.01 per unit of risk. If you would invest 7,927 in IPG Photonics on August 28, 2024 and sell it today you would lose (35.00) from holding IPG Photonics or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
IPG Photonics vs. Doubledown Interactive Co
Performance |
| Timeline |
| IPG Photonics |
| Doubledown Interactive |
IPG Photonics and Doubledown Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Doubledown Interactive
The main advantage of trading using opposite IPG Photonics and Doubledown Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Doubledown Interactive 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 Doubledown Interactive will offset losses from the drop in Doubledown Interactive's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Doubledown Interactive vs. AEye Inc | Doubledown Interactive vs. Arqit Quantum Warrants | Doubledown Interactive vs. Xos Equity Warrants |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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