Correlation Between IPG Photonics and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Almacenes Xito 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 Almacenes Xito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Almacenes xito SA, you can compare the effects of market volatilities on IPG Photonics and Almacenes Xito 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 Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Almacenes Xito.
Diversification Opportunities for IPG Photonics and Almacenes Xito
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPG and Almacenes is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of IPG Photonics i.e., IPG Photonics and Almacenes Xito go up and down completely randomly.
Pair Corralation between IPG Photonics and Almacenes Xito
Given the investment horizon of 90 days IPG Photonics is expected to generate 1.27 times more return on investment than Almacenes Xito. However, IPG Photonics is 1.27 times more volatile than Almacenes xito SA. It trades about -0.1 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.23 per unit of risk. If you would invest 8,229 in IPG Photonics on September 2, 2024 and sell it today you would lose (425.00) from holding IPG Photonics or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Almacenes xito SA
Performance |
| Timeline |
| IPG Photonics |
| Almacenes xito SA |
IPG Photonics and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Almacenes Xito
The main advantage of trading using opposite IPG Photonics and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Entegris |
| Almacenes Xito vs. Virco Manufacturing | Almacenes Xito vs. Postal Realty Trust | Almacenes Xito vs. Mativ Holdings | Almacenes Xito vs. Cleantech Power Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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