Correlation Between Nano Labs and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Nano Labs 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 Nano Labs and IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Labs and IPG Photonics, you can compare the effects of market volatilities on Nano Labs 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 Nano Labs with a short position of IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Labs and IPG Photonics.
Diversification Opportunities for Nano Labs and IPG Photonics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nano and IPG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics and Nano Labs 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 Nano Labs 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 Nano Labs i.e., Nano Labs and IPG Photonics go up and down completely randomly.
Pair Corralation between Nano Labs and IPG Photonics
Allowing for the 90-day total investment horizon Nano Labs is expected to generate 10.14 times more return on investment than IPG Photonics. However, Nano Labs is 10.14 times more volatile than IPG Photonics. It trades about 0.08 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.09 per unit of risk. If you would invest 606.00 in Nano Labs on October 31, 2024 and sell it today you would earn a total of 70.00 from holding Nano Labs or generate 11.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Nano Labs vs. IPG Photonics
Performance |
Timeline |
Nano Labs |
IPG Photonics |
Nano Labs and IPG Photonics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nano Labs and IPG Photonics
The main advantage of trading using opposite Nano Labs and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Labs 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.Nano Labs vs. SEALSQ Corp | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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