Correlation Between IPG Photonics and First Republic
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and First Republic Bank, you can compare the effects of market volatilities on IPG Photonics and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and First Republic.
Diversification Opportunities for IPG Photonics and First Republic
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPG and First is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of IPG Photonics i.e., IPG Photonics and First Republic go up and down completely randomly.
Pair Corralation between IPG Photonics and First Republic
If you would invest 7,639 in IPG Photonics on September 14, 2024 and sell it today you would earn a total of 173.00 from holding IPG Photonics or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
IPG Photonics vs. First Republic Bank
Performance |
| Timeline |
| IPG Photonics |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IPG Photonics and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and First Republic
The main advantage of trading using opposite IPG Photonics and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| First Republic vs. Entegris | First Republic vs. SEI Investments | First Republic vs. IPG Photonics | First Republic vs. Analog Devices |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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