Correlation Between Ingentec and Advanced Ceramic
Can any of the company-specific risk be diversified away by investing in both Ingentec and Advanced Ceramic 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 Advanced Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Advanced Ceramic X, you can compare the effects of market volatilities on Ingentec and Advanced Ceramic 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 Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Advanced Ceramic.
Diversification Opportunities for Ingentec and Advanced Ceramic
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingentec and Advanced is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X 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 Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Ingentec i.e., Ingentec and Advanced Ceramic go up and down completely randomly.
Pair Corralation between Ingentec and Advanced Ceramic
Assuming the 90 days trading horizon Ingentec is expected to under-perform the Advanced Ceramic. But the stock apears to be less risky and, when comparing its historical volatility, Ingentec is 1.3 times less risky than Advanced Ceramic. The stock trades about -0.19 of its potential returns per unit of risk. The Advanced Ceramic X is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16,450 in Advanced Ceramic X on August 29, 2024 and sell it today you would earn a total of 500.00 from holding Advanced Ceramic X or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingentec vs. Advanced Ceramic X
Performance |
| Timeline |
| Ingentec |
| Advanced Ceramic X |
Ingentec and Advanced Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingentec and Advanced Ceramic
The main advantage of trading using opposite Ingentec and Advanced Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Advanced Ceramic 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 Advanced Ceramic will offset losses from the drop in Advanced Ceramic's long position.| Ingentec vs. Nantex Industry Co | Ingentec vs. Chong Hong Construction | Ingentec vs. Cleanaway Co | Ingentec vs. Symtek Automation Asia |
| Advanced Ceramic vs. Accton Technology Corp | Advanced Ceramic vs. Wistron NeWeb Corp | Advanced Ceramic vs. Arcadyan Technology Corp | Advanced Ceramic vs. Sercomm Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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