Correlation Between IPG Photonics and Minority Equality

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Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Minority Equality 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 Minority Equality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Minority Equality Opportunities, you can compare the effects of market volatilities on IPG Photonics and Minority Equality 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 Minority Equality. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Minority Equality.

Diversification Opportunities for IPG Photonics and Minority Equality

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between IPG and Minority is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Minority Equality Opportunitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minority Equality 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 Minority Equality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minority Equality has no effect on the direction of IPG Photonics i.e., IPG Photonics and Minority Equality go up and down completely randomly.

Pair Corralation between IPG Photonics and Minority Equality

If you would invest  7,639  in IPG Photonics on September 14, 2024 and sell it today you would earn a total of  173.00  from holding IPG Photonics or generate 2.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy4.76%
ValuesDaily Returns

IPG Photonics  vs.  Minority Equality Opportunitie

 Performance 
       Timeline  
IPG Photonics 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in IPG Photonics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, IPG Photonics reported solid returns over the last few months and may actually be approaching a breakup point.
Minority Equality 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Minority Equality Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Minority Equality is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

IPG Photonics and Minority Equality Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IPG Photonics and Minority Equality

The main advantage of trading using opposite IPG Photonics and Minority Equality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Minority Equality 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 Minority Equality will offset losses from the drop in Minority Equality's long position.
The idea behind IPG Photonics and Minority Equality Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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