Correlation Between INC Research and Gelteq Limited
Can any of the company-specific risk be diversified away by investing in both INC Research and Gelteq Limited 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 INC Research and Gelteq Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INC Research Holdings and Gelteq Limited Ordinary, you can compare the effects of market volatilities on INC Research and Gelteq Limited 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 INC Research with a short position of Gelteq Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of INC Research and Gelteq Limited.
Diversification Opportunities for INC Research and Gelteq Limited
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between INC and Gelteq is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding INC Research Holdings and Gelteq Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelteq Limited Ordinary and INC Research 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 INC Research Holdings are associated (or correlated) with Gelteq Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelteq Limited Ordinary has no effect on the direction of INC Research i.e., INC Research and Gelteq Limited go up and down completely randomly.
Pair Corralation between INC Research and Gelteq Limited
Given the investment horizon of 90 days INC Research Holdings is expected to generate 0.66 times more return on investment than Gelteq Limited. However, INC Research Holdings is 1.52 times less risky than Gelteq Limited. It trades about -0.16 of its potential returns per unit of risk. Gelteq Limited Ordinary is currently generating about -0.2 per unit of risk. If you would invest 173.00 in INC Research Holdings on August 27, 2024 and sell it today you would lose (38.00) from holding INC Research Holdings or give up 21.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
INC Research Holdings vs. Gelteq Limited Ordinary
Performance |
| Timeline |
| INC Research Holdings |
| Gelteq Limited Ordinary |
INC Research and Gelteq Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INC Research and Gelteq Limited
The main advantage of trading using opposite INC Research and Gelteq Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INC Research position performs unexpectedly, Gelteq Limited 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 Gelteq Limited will offset losses from the drop in Gelteq Limited's long position.| INC Research vs. AYR Strategies Class | INC Research vs. Verano Holdings Corp | INC Research vs. TILT Holdings | INC Research vs. Lowell Farms |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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