Correlation Between IPG Photonics and Asure Software

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

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

Diversification Opportunities for IPG Photonics and Asure Software

0.37

Correlation Coefficient

IPG Photonics  Asure Software

Weak diversification

The 3 months correlation between IPG and Asure is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software 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 Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of IPG Photonics i.e., IPG Photonics and Asure Software go up and down completely randomly.

Pair Corralation between IPG Photonics and Asure Software

Given the investment horizon of 90 days IPG Photonics is expected to generate 0.7 times more return on investment than Asure Software. However, IPG Photonics is 1.43 times less risky than Asure Software. It trades about 0.26 of its potential returns per unit of risk. Asure Software is currently generating about -0.07 per unit of risk. If you would invest  5,491  in IPG Photonics on May 6, 2025 and sell it today you would earn a total of  2,031  from holding IPG Photonics or generate 36.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

IPG Photonics  vs.  Asure Software

IPG Photonics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IPG Photonics are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, IPG Photonics reported solid returns over the last few months and may actually be approaching a breakup point.

Asure Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asure Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with IPG Photonics and Asure Software

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

The idea behind IPG Photonics and Asure Software 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.