Correlation Between Ingenia Communities and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both Ingenia Communities and Iluka Resources 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 Iluka Resources 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 Iluka Resources, you can compare the effects of market volatilities on Ingenia Communities and Iluka Resources 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 Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingenia Communities and Iluka Resources.
Diversification Opportunities for Ingenia Communities and Iluka Resources
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ingenia and Iluka is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ingenia Communities Group and Iluka Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources 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 Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of Ingenia Communities i.e., Ingenia Communities and Iluka Resources go up and down completely randomly.
Pair Corralation between Ingenia Communities and Iluka Resources
Assuming the 90 days trading horizon Ingenia Communities Group is expected to generate 0.72 times more return on investment than Iluka Resources. However, Ingenia Communities Group is 1.4 times less risky than Iluka Resources. It trades about 0.16 of its potential returns per unit of risk. Iluka Resources is currently generating about -0.15 per unit of risk. If you would invest 491.00 in Ingenia Communities Group on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Ingenia Communities Group or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ingenia Communities Group vs. Iluka Resources
Performance |
| Timeline |
| Ingenia Communities |
| Iluka Resources |
Ingenia Communities and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingenia Communities and Iluka Resources
The main advantage of trading using opposite Ingenia Communities and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingenia Communities position performs unexpectedly, Iluka Resources 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| Ingenia Communities vs. Alternative Investment Trust | Ingenia Communities vs. Qbe Insurance Group | Ingenia Communities vs. Navigator Global Investments | Ingenia Communities vs. Carlton Investments |
| Iluka Resources vs. Dexus Convenience Retail | Iluka Resources vs. Clime Investment Management | Iluka Resources vs. Embark Education Group | Iluka Resources vs. Bailador Technology Invest |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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