Correlation Between IPG Photonics and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Sandstorm Gold 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 Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Sandstorm Gold Ltd, you can compare the effects of market volatilities on IPG Photonics and Sandstorm Gold 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Sandstorm Gold.
Diversification Opportunities for IPG Photonics and Sandstorm Gold
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IPG and Sandstorm is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of IPG Photonics i.e., IPG Photonics and Sandstorm Gold go up and down completely randomly.
Pair Corralation between IPG Photonics and Sandstorm Gold
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Sandstorm Gold. In addition to that, IPG Photonics is 1.08 times more volatile than Sandstorm Gold Ltd. It trades about -0.02 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.03 per unit of volatility. If you would invest 544.00 in Sandstorm Gold Ltd on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Sandstorm Gold Ltd or generate 6.43% 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. Sandstorm Gold Ltd
Performance |
| Timeline |
| IPG Photonics |
| Sandstorm Gold |
IPG Photonics and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Sandstorm Gold
The main advantage of trading using opposite IPG Photonics and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Sandstorm Gold 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Entegris |
| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |