Correlation Between IPG Photonics and Marti Technologies
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Marti Technologies 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 Marti Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Marti Technologies, you can compare the effects of market volatilities on IPG Photonics and Marti Technologies 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 Marti Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Marti Technologies.
Diversification Opportunities for IPG Photonics and Marti Technologies
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between IPG and Marti is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Marti Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marti Technologies 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 Marti Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marti Technologies has no effect on the direction of IPG Photonics i.e., IPG Photonics and Marti Technologies go up and down completely randomly.
Pair Corralation between IPG Photonics and Marti Technologies
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Marti Technologies. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 3.72 times less risky than Marti Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Marti Technologies is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 199.00 in Marti Technologies on September 1, 2024 and sell it today you would earn a total of 143.00 from holding Marti Technologies or generate 71.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Marti Technologies
Performance |
| Timeline |
| IPG Photonics |
| Marti Technologies |
IPG Photonics and Marti Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Marti Technologies
The main advantage of trading using opposite IPG Photonics and Marti Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Marti Technologies 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 Marti Technologies will offset losses from the drop in Marti Technologies' long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Marti Technologies vs. Fevertree Drinks Plc | Marti Technologies vs. Suntory Beverage Food | Marti Technologies vs. Datadog | Marti Technologies vs. National Beverage Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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