Correlation Between IPG Photonics and Ihuman
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Ihuman 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 Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Ihuman Inc, you can compare the effects of market volatilities on IPG Photonics and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Ihuman.
Diversification Opportunities for IPG Photonics and Ihuman
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and Ihuman is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of IPG Photonics i.e., IPG Photonics and Ihuman go up and down completely randomly.
Pair Corralation between IPG Photonics and Ihuman
Given the investment horizon of 90 days IPG Photonics is expected to generate 0.66 times more return on investment than Ihuman. However, IPG Photonics is 1.52 times less risky than Ihuman. It trades about 0.03 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.01 per unit of risk. If you would invest 7,272 in IPG Photonics on November 1, 2024 and sell it today you would earn a total of 52.50 from holding IPG Photonics or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Ihuman Inc
Performance |
| Timeline |
| IPG Photonics |
| Ihuman Inc |
IPG Photonics and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Ihuman
The main advantage of trading using opposite IPG Photonics and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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