Correlation Between IPG Photonics and Fidelis Insurance
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Fidelis Insurance 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 Fidelis Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Fidelis Insurance Holdings, you can compare the effects of market volatilities on IPG Photonics and Fidelis Insurance 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 Fidelis Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Fidelis Insurance.
Diversification Opportunities for IPG Photonics and Fidelis Insurance
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between IPG and Fidelis is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance 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 Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of IPG Photonics i.e., IPG Photonics and Fidelis Insurance go up and down completely randomly.
Pair Corralation between IPG Photonics and Fidelis Insurance
Given the investment horizon of 90 days IPG Photonics is expected to generate 16.64 times less return on investment than Fidelis Insurance. In addition to that, IPG Photonics is 1.17 times more volatile than Fidelis Insurance Holdings. It trades about 0.01 of its total potential returns per unit of risk. Fidelis Insurance Holdings is currently generating about 0.12 per unit of volatility. If you would invest 1,846 in Fidelis Insurance Holdings on September 13, 2024 and sell it today you would earn a total of 89.00 from holding Fidelis Insurance Holdings or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Fidelis Insurance Holdings
Performance |
| Timeline |
| IPG Photonics |
| Fidelis Insurance |
IPG Photonics and Fidelis Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Fidelis Insurance
The main advantage of trading using opposite IPG Photonics and Fidelis Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Fidelis Insurance 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 Fidelis Insurance will offset losses from the drop in Fidelis Insurance's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Fidelis Insurance vs. Enstar Group Limited | Fidelis Insurance vs. Aegon NV ADR | Fidelis Insurance vs. American International Group | Fidelis Insurance vs. Axa Equitable 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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