Correlation Between IPG Photonics and Inuvo

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

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

Diversification Opportunities for IPG Photonics and Inuvo

0.7

Correlation Coefficient

IPG Photonics  Inuvo

Poor diversification

The 3 months correlation between IPG and Inuvo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Inuvo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inuvo Inc 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 Inuvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inuvo Inc has no effect on the direction of IPG Photonics i.e., IPG Photonics and Inuvo go up and down completely randomly.

Pair Corralation between IPG Photonics and Inuvo

Given the investment horizon of 90 days IPG Photonics is expected to generate 1.01 times less return on investment than Inuvo. But when comparing it to its historical volatility, IPG Photonics is 2.81 times less risky than Inuvo. It trades about 0.26 of its potential returns per unit of risk. Inuvo Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  400.00  in Inuvo Inc on May 6, 2025 and sell it today you would earn a total of  105.00  from holding Inuvo Inc or generate 26.25% return on investment over 90 days.

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

IPG Photonics  vs.  Inuvo Inc

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.

Inuvo Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inuvo Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Inuvo showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPG Photonics and Inuvo

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

The idea behind IPG Photonics and Inuvo Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.