Correlation Between IPG Photonics and 05565AAN3
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By analyzing existing cross correlation between IPG Photonics and BNP 7375, you can compare the effects of market volatilities on IPG Photonics and 05565AAN3 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 05565AAN3. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and 05565AAN3.
Diversification Opportunities for IPG Photonics and 05565AAN3
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IPG and 05565AAN3 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and BNP 7375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 05565AAN3 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 05565AAN3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 05565AAN3 has no effect on the direction of IPG Photonics i.e., IPG Photonics and 05565AAN3 go up and down completely randomly.
Pair Corralation between IPG Photonics and 05565AAN3
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the 05565AAN3. In addition to that, IPG Photonics is 7.44 times more volatile than BNP 7375. It trades about -0.03 of its total potential returns per unit of risk. BNP 7375 is currently generating about 0.02 per unit of volatility. If you would invest 9,984 in BNP 7375 on September 2, 2024 and sell it today you would earn a total of 41.00 from holding BNP 7375 or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 23.79% |
| Values | Daily Returns |
IPG Photonics vs. BNP 7375
Performance |
| Timeline |
| IPG Photonics |
| 05565AAN3 |
IPG Photonics and 05565AAN3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and 05565AAN3
The main advantage of trading using opposite IPG Photonics and 05565AAN3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, 05565AAN3 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 05565AAN3 will offset losses from the drop in 05565AAN3's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Entegris |
| 05565AAN3 vs. Sandstorm Gold Ltd | 05565AAN3 vs. IPG Photonics | 05565AAN3 vs. MACOM Technology Solutions | 05565AAN3 vs. Advanced Micro Devices |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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