Correlation Between Ingentec and Welltend Technology
Can any of the company-specific risk be diversified away by investing in both Ingentec and Welltend Technology 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 Ingentec and Welltend Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Welltend Technology Corp, you can compare the effects of market volatilities on Ingentec and Welltend Technology 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 Ingentec with a short position of Welltend Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Welltend Technology.
Diversification Opportunities for Ingentec and Welltend Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ingentec and Welltend is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Welltend Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltend Technology Corp and Ingentec 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 Ingentec are associated (or correlated) with Welltend Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltend Technology Corp has no effect on the direction of Ingentec i.e., Ingentec and Welltend Technology go up and down completely randomly.
Pair Corralation between Ingentec and Welltend Technology
Assuming the 90 days trading horizon Ingentec is expected to generate 0.77 times more return on investment than Welltend Technology. However, Ingentec is 1.3 times less risky than Welltend Technology. It trades about 0.16 of its potential returns per unit of risk. Welltend Technology Corp is currently generating about -0.25 per unit of risk. If you would invest 17,250 in Ingentec on November 3, 2024 and sell it today you would earn a total of 850.00 from holding Ingentec or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingentec vs. Welltend Technology Corp
Performance |
| Timeline |
| Ingentec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Welltend Technology Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ingentec and Welltend Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingentec and Welltend Technology
The main advantage of trading using opposite Ingentec and Welltend Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Welltend Technology 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 Welltend Technology will offset losses from the drop in Welltend Technology's long position.The idea behind Ingentec and Welltend Technology Corp 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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