Correlation Between IPG Photonics and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Tokyo Electron 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 Tokyo Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Tokyo Electron, you can compare the effects of market volatilities on IPG Photonics and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Tokyo Electron.
Diversification Opportunities for IPG Photonics and Tokyo Electron
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPG and Tokyo is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Tokyo Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of IPG Photonics i.e., IPG Photonics and Tokyo Electron go up and down completely randomly.
Pair Corralation between IPG Photonics and Tokyo Electron
Given the investment horizon of 90 days IPG Photonics is expected to generate 0.61 times more return on investment than Tokyo Electron. However, IPG Photonics is 1.65 times less risky than Tokyo Electron. It trades about 0.13 of its potential returns per unit of risk. Tokyo Electron is currently generating about -0.01 per unit of risk. If you would invest 6,543 in IPG Photonics on September 2, 2024 and sell it today you would earn a total of 1,261 from holding IPG Photonics or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Tokyo Electron
Performance |
| Timeline |
| IPG Photonics |
| Tokyo Electron |
IPG Photonics and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Tokyo Electron
The main advantage of trading using opposite IPG Photonics and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Entegris |
| Tokyo Electron vs. Integral Ad Science | Tokyo Electron vs. Western Midstream Partners | Tokyo Electron vs. KVH Industries | Tokyo Electron vs. WiMi Hologram Cloud |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |