Correlation Between IPG Photonics and Jupiter Marine
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Jupiter Marine 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 Jupiter Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Jupiter Marine International, you can compare the effects of market volatilities on IPG Photonics and Jupiter Marine 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 Jupiter Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Jupiter Marine.
Diversification Opportunities for IPG Photonics and Jupiter Marine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPG and Jupiter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Jupiter Marine International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Marine Inter 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 Jupiter Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Marine Inter has no effect on the direction of IPG Photonics i.e., IPG Photonics and Jupiter Marine go up and down completely randomly.
Pair Corralation between IPG Photonics and Jupiter Marine
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Jupiter Marine. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 30.35 times less risky than Jupiter Marine. The stock trades about -0.02 of its potential returns per unit of risk. The Jupiter Marine International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Jupiter Marine International on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Jupiter Marine International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
IPG Photonics vs. Jupiter Marine International
Performance |
| Timeline |
| IPG Photonics |
| Jupiter Marine Inter |
IPG Photonics and Jupiter Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Jupiter Marine
The main advantage of trading using opposite IPG Photonics and Jupiter Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Jupiter Marine 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 Jupiter Marine will offset losses from the drop in Jupiter Marine's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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