Correlation Between Iluka Resources and Ingenia Communities
Can any of the company-specific risk be diversified away by investing in both Iluka Resources and Ingenia Communities 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 Iluka Resources and Ingenia Communities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iluka Resources and Ingenia Communities Group, you can compare the effects of market volatilities on Iluka Resources and Ingenia Communities 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 Iluka Resources with a short position of Ingenia Communities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iluka Resources and Ingenia Communities.
Diversification Opportunities for Iluka Resources and Ingenia Communities
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Iluka and Ingenia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Iluka Resources and Ingenia Communities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingenia Communities and Iluka Resources 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 Iluka Resources are associated (or correlated) with Ingenia Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingenia Communities has no effect on the direction of Iluka Resources i.e., Iluka Resources and Ingenia Communities go up and down completely randomly.
Pair Corralation between Iluka Resources and Ingenia Communities
Assuming the 90 days trading horizon Iluka Resources is expected to under-perform the Ingenia Communities. In addition to that, Iluka Resources is 1.49 times more volatile than Ingenia Communities Group. It trades about -0.17 of its total potential returns per unit of risk. Ingenia Communities Group is currently generating about 0.07 per unit of volatility. If you would invest 490.00 in Ingenia Communities Group on August 26, 2024 and sell it today you would earn a total of 10.00 from holding Ingenia Communities Group or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iluka Resources vs. Ingenia Communities Group
Performance |
| Timeline |
| Iluka Resources |
| Ingenia Communities |
Iluka Resources and Ingenia Communities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iluka Resources and Ingenia Communities
The main advantage of trading using opposite Iluka Resources and Ingenia Communities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iluka Resources position performs unexpectedly, Ingenia Communities 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 Ingenia Communities will offset losses from the drop in Ingenia Communities' long position.| Iluka Resources vs. Retail Food Group | Iluka Resources vs. Perseus Mining | Iluka Resources vs. Kingsrose Mining | Iluka Resources vs. Andean Silver Limited |
| Ingenia Communities vs. Prime Financial Group | Ingenia Communities vs. Perpetual Credit Income | Ingenia Communities vs. Dicker Data | Ingenia Communities vs. EP Financial Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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