Correlation Between Trk Corp and Ingentec
Can any of the company-specific risk be diversified away by investing in both Trk Corp and Ingentec 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 Trk Corp and Ingentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trk Corp and Ingentec, you can compare the effects of market volatilities on Trk Corp and Ingentec 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 Trk Corp with a short position of Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trk Corp and Ingentec.
Diversification Opportunities for Trk Corp and Ingentec
Very good diversification
The 3 months correlation between Trk and Ingentec is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Trk Corp and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Trk Corp 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 Trk Corp are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Trk Corp i.e., Trk Corp and Ingentec go up and down completely randomly.
Pair Corralation between Trk Corp and Ingentec
Assuming the 90 days trading horizon Trk Corp is expected to under-perform the Ingentec. But the stock apears to be less risky and, when comparing its historical volatility, Trk Corp is 2.04 times less risky than Ingentec. The stock trades about -0.03 of its potential returns per unit of risk. The Ingentec is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 19,539 in Ingentec on September 1, 2024 and sell it today you would lose (139.00) from holding Ingentec or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trk Corp vs. Ingentec
Performance |
| Timeline |
| Trk Corp |
| Ingentec |
Trk Corp and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trk Corp and Ingentec
The main advantage of trading using opposite Trk Corp and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trk Corp position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.| Trk Corp vs. Formosa Taffeta Co | Trk Corp vs. Tainan Spinning Co | Trk Corp vs. Carnival Industrial Corp | Trk Corp vs. Lily Textile Co |
| Ingentec vs. Johnson Chemical Pharmaceutical | Ingentec vs. Hi Lai Foods Co | Ingentec vs. Chung Hwa Food | Ingentec vs. Silicon Power Computer |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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