Correlation Between IPG Photonics and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and INFICON Holding 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 INFICON Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and INFICON Holding AG, you can compare the effects of market volatilities on IPG Photonics and INFICON Holding 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and INFICON Holding.
Diversification Opportunities for IPG Photonics and INFICON Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IPG and INFICON is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of IPG Photonics i.e., IPG Photonics and INFICON Holding go up and down completely randomly.
Pair Corralation between IPG Photonics and INFICON Holding
If you would invest 7,506 in IPG Photonics on September 15, 2024 and sell it today you would earn a total of 257.00 from holding IPG Photonics or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. INFICON Holding AG
Performance |
| Timeline |
| IPG Photonics |
| INFICON Holding AG |
IPG Photonics and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and INFICON Holding
The main advantage of trading using opposite IPG Photonics and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, INFICON Holding 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 INFICON Holding will offset losses from the drop in INFICON Holding's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| INFICON Holding vs. EvoAir Holdings | INFICON Holding vs. Coda Octopus Group | INFICON Holding vs. Westinghouse Air Brake | INFICON Holding vs. IPG Photonics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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