Correlation Between Nano Labs and IPG Photonics

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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

NanoIPGDiversified AwayNanoIPGDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Nano Labs  vs.  IPG Photonics

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50050100
JavaScript chart by amCharts 3.21.15NA IPGP
       Timeline  
Nano Labs 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nano Labs are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Nano Labs sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan468101214
IPG Photonics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days IPG Photonics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan70758085

Nano Labs and IPG Photonics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-69.12-51.77-34.41-17.060.017.7735.8553.9372.0 0.010.020.030.040.050.06
JavaScript chart by amCharts 3.21.15NA IPGP
       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.
The idea behind Nano Labs and IPG Photonics 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.
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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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