Correlation Between IPG Photonics and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and RCI Hospitality 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 RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and RCI Hospitality Holdings, you can compare the effects of market volatilities on IPG Photonics and RCI Hospitality 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 RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and RCI Hospitality.
Diversification Opportunities for IPG Photonics and RCI Hospitality
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IPG and RCI is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings 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 RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of IPG Photonics i.e., IPG Photonics and RCI Hospitality go up and down completely randomly.
Pair Corralation between IPG Photonics and RCI Hospitality
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the RCI Hospitality. In addition to that, IPG Photonics is 1.44 times more volatile than RCI Hospitality Holdings. It trades about 0.0 of its total potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.06 per unit of volatility. If you would invest 5,106 in RCI Hospitality Holdings on September 13, 2024 and sell it today you would earn a total of 103.00 from holding RCI Hospitality Holdings or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. RCI Hospitality Holdings
Performance |
| Timeline |
| IPG Photonics |
| RCI Hospitality Holdings |
IPG Photonics and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and RCI Hospitality
The main advantage of trading using opposite IPG Photonics and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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