Correlation Between IPG Photonics and Uniroyal Global

Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Uniroyal Global 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 Uniroyal Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IPG Photonics and Uniroyal Global Engineered, you can compare the effects of market volatilities on IPG Photonics and Uniroyal Global 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 Uniroyal Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Uniroyal Global.

Diversification Opportunities for IPG Photonics and Uniroyal Global

0.0

Correlation Coefficient

IPG Photonics  Uniroyal Global

Pay attention - limited upside

The 3 months correlation between IPG and Uniroyal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Uniroyal Global Engineered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniroyal Global Engi 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 Uniroyal Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniroyal Global Engi has no effect on the direction of IPG Photonics i.e., IPG Photonics and Uniroyal Global go up and down completely randomly.

Pair Corralation between IPG Photonics and Uniroyal Global

If you would invest  0.08  in Uniroyal Global Engineered on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Uniroyal Global Engineered or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

IPG Photonics  vs.  Uniroyal Global Engineered

IPG Photonics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IPG Photonics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, IPG Photonics is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Uniroyal Global Engi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniroyal Global Engineered has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Uniroyal Global is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IPG Photonics and Uniroyal Global

The main advantage of trading using opposite IPG Photonics and Uniroyal Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Uniroyal Global 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 Uniroyal Global will offset losses from the drop in Uniroyal Global's long position.

The idea behind IPG Photonics and Uniroyal Global Engineered pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.