Correlation Between IPG Photonics and NESNVX
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By analyzing existing cross correlation between IPG Photonics and NESNVX 125 15 SEP 30, you can compare the effects of market volatilities on IPG Photonics and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and NESNVX.
Diversification Opportunities for IPG Photonics and NESNVX
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IPG and NESNVX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and NESNVX 125 15 SEP 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 125 15 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 125 15 has no effect on the direction of IPG Photonics i.e., IPG Photonics and NESNVX go up and down completely randomly.
Pair Corralation between IPG Photonics and NESNVX
Given the investment horizon of 90 days IPG Photonics is expected to under-perform the NESNVX. In addition to that, IPG Photonics is 2.83 times more volatile than NESNVX 125 15 SEP 30. It trades about -0.03 of its total potential returns per unit of risk. NESNVX 125 15 SEP 30 is currently generating about 0.01 per unit of volatility. If you would invest 8,005 in NESNVX 125 15 SEP 30 on September 3, 2024 and sell it today you would earn a total of 21.00 from holding NESNVX 125 15 SEP 30 or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.77% |
| Values | Daily Returns |
IPG Photonics vs. NESNVX 125 15 SEP 30
Performance |
| Timeline |
| IPG Photonics |
| NESNVX 125 15 |
IPG Photonics and NESNVX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and NESNVX
The main advantage of trading using opposite IPG Photonics and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, NESNVX 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 NESNVX will offset losses from the drop in NESNVX's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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