Correlation Between IPG Photonics and Hf Foods
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Hf Foods 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 Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Hf Foods Group, you can compare the effects of market volatilities on IPG Photonics and Hf Foods 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 Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Hf Foods.
Diversification Opportunities for IPG Photonics and Hf Foods
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and HFFG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group 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 Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of IPG Photonics i.e., IPG Photonics and Hf Foods go up and down completely randomly.
Pair Corralation between IPG Photonics and Hf Foods
Given the investment horizon of 90 days IPG Photonics is expected to generate 1.61 times more return on investment than Hf Foods. However, IPG Photonics is 1.61 times more volatile than Hf Foods Group. It trades about -0.01 of its potential returns per unit of risk. Hf Foods Group is currently generating about -0.13 per unit of risk. If you would invest 7,476 in IPG Photonics on August 24, 2024 and sell it today you would lose (124.00) from holding IPG Photonics or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
IPG Photonics vs. Hf Foods Group
Performance |
| Timeline |
| IPG Photonics |
| Hf Foods Group |
IPG Photonics and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Hf Foods
The main advantage of trading using opposite IPG Photonics and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Hf Foods 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 Hf Foods will offset losses from the drop in Hf Foods' long position.| IPG Photonics vs. Cohu Inc | IPG Photonics vs. Entegris | IPG Photonics vs. Photronics | IPG Photonics vs. Veeco Instruments |
| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. AMCON Distributing |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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