Correlation Between Cabot and Ingevity Corp
Can any of the company-specific risk be diversified away by investing in both Cabot and Ingevity Corp 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 Cabot and Ingevity Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabot and Ingevity Corp, you can compare the effects of market volatilities on Cabot and Ingevity Corp 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 Cabot with a short position of Ingevity Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabot and Ingevity Corp.
Diversification Opportunities for Cabot and Ingevity Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cabot and Ingevity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cabot and Ingevity Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingevity Corp and Cabot 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 Cabot are associated (or correlated) with Ingevity Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingevity Corp has no effect on the direction of Cabot i.e., Cabot and Ingevity Corp go up and down completely randomly.
Pair Corralation between Cabot and Ingevity Corp
Considering the 90-day investment horizon Cabot is expected to under-perform the Ingevity Corp. But the stock apears to be less risky and, when comparing its historical volatility, Cabot is 1.37 times less risky than Ingevity Corp. The stock trades about 0.0 of its potential returns per unit of risk. The Ingevity Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,165 in Ingevity Corp on August 31, 2024 and sell it today you would earn a total of 608.00 from holding Ingevity Corp or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabot vs. Ingevity Corp
Performance |
| Timeline |
| Cabot |
| Ingevity Corp |
Cabot and Ingevity Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabot and Ingevity Corp
The main advantage of trading using opposite Cabot and Ingevity Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabot position performs unexpectedly, Ingevity Corp 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 Ingevity Corp will offset losses from the drop in Ingevity Corp's long position.The idea behind Cabot and Ingevity 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.| Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Minerals Technologies | Ingevity Corp vs. Quaker Chemical | Ingevity Corp vs. Oil Dri |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |