Correlation Between Ingenia Communities and American West
Can any of the company-specific risk be diversified away by investing in both Ingenia Communities and American West 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 Ingenia Communities and American West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingenia Communities Group and American West Metals, you can compare the effects of market volatilities on Ingenia Communities and American West 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 Ingenia Communities with a short position of American West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingenia Communities and American West.
Diversification Opportunities for Ingenia Communities and American West
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingenia and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ingenia Communities Group and American West Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American West Metals and Ingenia Communities 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 Ingenia Communities Group are associated (or correlated) with American West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American West Metals has no effect on the direction of Ingenia Communities i.e., Ingenia Communities and American West go up and down completely randomly.
Pair Corralation between Ingenia Communities and American West
Assuming the 90 days trading horizon Ingenia Communities Group is expected to generate 0.53 times more return on investment than American West. However, Ingenia Communities Group is 1.9 times less risky than American West. It trades about 0.12 of its potential returns per unit of risk. American West Metals is currently generating about -0.37 per unit of risk. If you would invest 494.00 in Ingenia Communities Group on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Ingenia Communities Group or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingenia Communities Group vs. American West Metals
Performance |
| Timeline |
| Ingenia Communities |
| American West Metals |
Ingenia Communities and American West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingenia Communities and American West
The main advantage of trading using opposite Ingenia Communities and American West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingenia Communities position performs unexpectedly, American West 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 American West will offset losses from the drop in American West's long position.| Ingenia Communities vs. Ramsay Health Care | Ingenia Communities vs. Prime Financial Group | Ingenia Communities vs. Bank of Queensland | Ingenia Communities vs. Healthco Healthcare and |
| American West vs. Northern Star Resources | American West vs. Evolution Mining | American West vs. Bluescope Steel | American West vs. Sandfire Resources NL |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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