Correlation Between IPG Photonics and Orosur Mining
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Orosur Mining 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 Orosur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Orosur Mining, you can compare the effects of market volatilities on IPG Photonics and Orosur Mining 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 Orosur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Orosur Mining.
Diversification Opportunities for IPG Photonics and Orosur Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IPG and Orosur is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Orosur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orosur Mining 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 Orosur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orosur Mining has no effect on the direction of IPG Photonics i.e., IPG Photonics and Orosur Mining go up and down completely randomly.
Pair Corralation between IPG Photonics and Orosur Mining
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Orosur Mining. But the stock apears to be less risky and, when comparing its historical volatility, IPG Photonics is 29.63 times less risky than Orosur Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Orosur Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Orosur Mining on September 14, 2024 and sell it today you would earn a total of 5.20 from holding Orosur Mining or generate 148.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
IPG Photonics vs. Orosur Mining
Performance |
| Timeline |
| IPG Photonics |
| Orosur Mining |
IPG Photonics and Orosur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Orosur Mining
The main advantage of trading using opposite IPG Photonics and Orosur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Orosur Mining 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 Orosur Mining will offset losses from the drop in Orosur Mining's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Orosur Mining vs. Advantage Solutions | Orosur Mining vs. Atlas Corp | Orosur Mining vs. PureCycle Technologies | Orosur Mining vs. WM Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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