Correlation Between Paysafe and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Paysafe and IPG Photonics 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 Paysafe and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe and IPG Photonics, you can compare the effects of market volatilities on Paysafe and IPG Photonics 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 Paysafe with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and IPG Photonics.
Diversification Opportunities for Paysafe and IPG Photonics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Paysafe and IPG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Paysafe 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 Paysafe are associated (or correlated) with IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of Paysafe i.e., Paysafe and IPG Photonics go up and down completely randomly.
Pair Corralation between Paysafe and IPG Photonics
Given the investment horizon of 90 days Paysafe is expected to generate 1.75 times more return on investment than IPG Photonics. However, Paysafe is 1.75 times more volatile than IPG Photonics. It trades about 0.03 of its potential returns per unit of risk. IPG Photonics is currently generating about 0.0 per unit of risk. If you would invest 1,680 in Paysafe on August 29, 2024 and sell it today you would earn a total of 298.00 from holding Paysafe or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paysafe vs. IPG Photonics
Performance |
| Timeline |
| Paysafe |
| IPG Photonics |
Paysafe and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and IPG Photonics
The main advantage of trading using opposite Paysafe and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' long position.| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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