Correlation Between Rubicon Technology and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Rubicon Technology 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 Rubicon Technology and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubicon Technology and IPG Photonics, you can compare the effects of market volatilities on Rubicon Technology 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 Rubicon Technology with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Technology and IPG Photonics.
Diversification Opportunities for Rubicon Technology and IPG Photonics
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rubicon and IPG is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Technology and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Rubicon Technology 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 Rubicon Technology 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 Rubicon Technology i.e., Rubicon Technology and IPG Photonics go up and down completely randomly.
Pair Corralation between Rubicon Technology and IPG Photonics
If you would invest 7,927 in IPG Photonics on August 28, 2024 and sell it today you would lose (35.00) from holding IPG Photonics or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Rubicon Technology vs. IPG Photonics
Performance |
| Timeline |
| Rubicon Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IPG Photonics |
Rubicon Technology and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubicon Technology and IPG Photonics
The main advantage of trading using opposite Rubicon Technology and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Technology 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.| Rubicon Technology vs. Axcelis Technologies | Rubicon Technology vs. inTest | Rubicon Technology vs. Lam Research Corp | Rubicon Technology vs. Photronics |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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