Correlation Between IPG Photonics and Entegris
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Entegris 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 Entegris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Entegris, you can compare the effects of market volatilities on IPG Photonics and Entegris 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 Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Entegris.
Diversification Opportunities for IPG Photonics and Entegris
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPG and Entegris is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of IPG Photonics i.e., IPG Photonics and Entegris go up and down completely randomly.
Pair Corralation between IPG Photonics and Entegris
Given the investment horizon of 90 days IPG Photonics is expected to generate 7.58 times less return on investment than Entegris. In addition to that, IPG Photonics is 1.07 times more volatile than Entegris. It trades about 0.01 of its total potential returns per unit of risk. Entegris is currently generating about 0.05 per unit of volatility. If you would invest 10,585 in Entegris on August 27, 2024 and sell it today you would earn a total of 217.00 from holding Entegris or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Entegris
Performance |
| Timeline |
| IPG Photonics |
| Entegris |
IPG Photonics and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Entegris
The main advantage of trading using opposite IPG Photonics and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Entegris 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 Entegris will offset losses from the drop in Entegris' long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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