Correlation Between IPG Photonics and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Evolution Gaming 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 Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Evolution Gaming Group, you can compare the effects of market volatilities on IPG Photonics and Evolution Gaming 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Evolution Gaming.
Diversification Opportunities for IPG Photonics and Evolution Gaming
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPG and Evolution is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of IPG Photonics i.e., IPG Photonics and Evolution Gaming go up and down completely randomly.
Pair Corralation between IPG Photonics and Evolution Gaming
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Evolution Gaming. In addition to that, IPG Photonics is 1.1 times more volatile than Evolution Gaming Group. It trades about 0.0 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about 0.0 per unit of volatility. If you would invest 9,942 in Evolution Gaming Group on August 24, 2024 and sell it today you would lose (1,018) from holding Evolution Gaming Group or give up 10.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Evolution Gaming Group
Performance |
| Timeline |
| IPG Photonics |
| Evolution Gaming |
IPG Photonics and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Evolution Gaming
The main advantage of trading using opposite IPG Photonics and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| IPG Photonics vs. Cohu Inc | IPG Photonics vs. Entegris | IPG Photonics vs. Veeco Instruments | IPG Photonics vs. Ultra Clean Holdings |
| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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