Correlation Between IPG Photonics and Brooks Automation
Can any of the company-specific risk be diversified away by investing in both IPG Photonics and Brooks Automation 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 Brooks Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Brooks Automation, you can compare the effects of market volatilities on IPG Photonics and Brooks Automation 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 Brooks Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Brooks Automation.
Diversification Opportunities for IPG Photonics and Brooks Automation
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPG and Brooks is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Brooks Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooks Automation 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 Brooks Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooks Automation has no effect on the direction of IPG Photonics i.e., IPG Photonics and Brooks Automation go up and down completely randomly.
Pair Corralation between IPG Photonics and Brooks Automation
If you would invest (100.00) in Brooks Automation on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Brooks Automation or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
IPG Photonics vs. Brooks Automation
Performance |
Timeline |
IPG Photonics |
Brooks Automation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IPG Photonics and Brooks Automation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IPG Photonics and Brooks Automation
The main advantage of trading using opposite IPG Photonics and Brooks Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics position performs unexpectedly, Brooks Automation 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 Brooks Automation will offset losses from the drop in Brooks Automation's long position.IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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