Correlation Between IPG Photonics and Sapiens International
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Sapiens International 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 Sapiens International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Sapiens International, you can compare the effects of market volatilities on IPG Photonics and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Sapiens International.
Diversification Opportunities for IPG Photonics and Sapiens International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IPG and Sapiens is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of IPG Photonics i.e., IPG Photonics and Sapiens International go up and down completely randomly.
Pair Corralation between IPG Photonics and Sapiens International
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the Sapiens International. In addition to that, IPG Photonics is 1.03 times more volatile than Sapiens International. It trades about 0.0 of its total potential returns per unit of risk. Sapiens International is currently generating about 0.05 per unit of volatility. If you would invest 1,768 in Sapiens International on August 29, 2024 and sell it today you would earn a total of 952.00 from holding Sapiens International or generate 53.85% 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. Sapiens International
Performance |
| Timeline |
| IPG Photonics |
| Sapiens International |
IPG Photonics and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Sapiens International
The main advantage of trading using opposite IPG Photonics and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Sapiens International vs. Marin Software | Sapiens International vs. EzFill Holdings | Sapiens International vs. Trust Stamp | Sapiens International vs. Infobird Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |