Correlation Between IPG Photonics and SmartStop Self
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and SmartStop Self 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 SmartStop Self into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and SmartStop Self Storage, you can compare the effects of market volatilities on IPG Photonics and SmartStop Self 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 SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and SmartStop Self.
Diversification Opportunities for IPG Photonics and SmartStop Self
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPG and SmartStop is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of IPG Photonics i.e., IPG Photonics and SmartStop Self go up and down completely randomly.
Pair Corralation between IPG Photonics and SmartStop Self
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the SmartStop Self. In addition to that, IPG Photonics is 1.49 times more volatile than SmartStop Self Storage. It trades about -0.01 of its total potential returns per unit of risk. SmartStop Self Storage is currently generating about 0.22 per unit of volatility. If you would invest 900.00 in SmartStop Self Storage on October 23, 2024 and sell it today you would earn a total of 50.00 from holding SmartStop Self Storage or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
IPG Photonics vs. SmartStop Self Storage
Performance |
| Timeline |
| IPG Photonics |
| SmartStop Self Storage |
IPG Photonics and SmartStop Self Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and SmartStop Self
The main advantage of trading using opposite IPG Photonics and SmartStop Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, SmartStop Self 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 SmartStop Self will offset losses from the drop in SmartStop Self's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| SmartStop Self vs. Industrial Logistics Properties | SmartStop Self vs. Safestore Holdings plc | SmartStop Self vs. Plymouth Industrial REIT | SmartStop Self vs. Terreno Realty |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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