Correlation Between IPG Photonics and Coca Cola
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and The Coca Cola, you can compare the effects of market volatilities on IPG Photonics and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Coca Cola.
Diversification Opportunities for IPG Photonics and Coca Cola
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPG and Coca is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of IPG Photonics i.e., IPG Photonics and Coca Cola go up and down completely randomly.
Pair Corralation between IPG Photonics and Coca Cola
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Coca Cola. In addition to that, IPG Photonics is 2.86 times more volatile than The Coca Cola. It trades about -0.03 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.06 per unit of volatility. If you would invest 5,816 in The Coca Cola on August 28, 2024 and sell it today you would earn a total of 622.00 from holding The Coca Cola or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. The Coca Cola
Performance |
| Timeline |
| IPG Photonics |
| Coca Cola |
IPG Photonics and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Coca Cola
The main advantage of trading using opposite IPG Photonics and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |