Correlation Between IPG Photonics and Zhibao Technology
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Zhibao Technology 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 Zhibao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Zhibao Technology Class, you can compare the effects of market volatilities on IPG Photonics and Zhibao Technology 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 Zhibao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Zhibao Technology.
Diversification Opportunities for IPG Photonics and Zhibao Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPG and Zhibao is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Zhibao Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhibao Technology Class 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 Zhibao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhibao Technology Class has no effect on the direction of IPG Photonics i.e., IPG Photonics and Zhibao Technology go up and down completely randomly.
Pair Corralation between IPG Photonics and Zhibao Technology
Given the investment horizon of 90 days IPG Photonics is expected to generate 0.37 times more return on investment than Zhibao Technology. However, IPG Photonics is 2.67 times less risky than Zhibao Technology. It trades about -0.02 of its potential returns per unit of risk. Zhibao Technology Class is currently generating about -0.03 per unit of risk. If you would invest 8,426 in IPG Photonics on September 2, 2024 and sell it today you would lose (622.00) from holding IPG Photonics or give up 7.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Zhibao Technology Class
Performance |
| Timeline |
| IPG Photonics |
| Zhibao Technology Class |
IPG Photonics and Zhibao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Zhibao Technology
The main advantage of trading using opposite IPG Photonics and Zhibao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Zhibao Technology 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 Zhibao Technology will offset losses from the drop in Zhibao Technology's long position.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Entegris |
| Zhibao Technology vs. China Tontine Wines | Zhibao Technology vs. Xponential Fitness | Zhibao Technology vs. Mattel Inc | Zhibao Technology vs. Playa Hotels Resorts |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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