Correlation Between Ingram Micro and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Ingram Micro and Arrow Electronics 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 Ingram Micro and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingram Micro Holding and Arrow Electronics, you can compare the effects of market volatilities on Ingram Micro and Arrow Electronics 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 Ingram Micro with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingram Micro and Arrow Electronics.
Diversification Opportunities for Ingram Micro and Arrow Electronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ingram and Arrow is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ingram Micro Holding and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Ingram Micro 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 Ingram Micro Holding are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Ingram Micro i.e., Ingram Micro and Arrow Electronics go up and down completely randomly.
Pair Corralation between Ingram Micro and Arrow Electronics
Given the investment horizon of 90 days Ingram Micro Holding is expected to generate 0.54 times more return on investment than Arrow Electronics. However, Ingram Micro Holding is 1.85 times less risky than Arrow Electronics. It trades about -0.21 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.12 per unit of risk. If you would invest 2,401 in Ingram Micro Holding on August 28, 2024 and sell it today you would lose (185.00) from holding Ingram Micro Holding or give up 7.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingram Micro Holding vs. Arrow Electronics
Performance |
| Timeline |
| Ingram Micro Holding |
| Arrow Electronics |
Ingram Micro and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingram Micro and Arrow Electronics
The main advantage of trading using opposite Ingram Micro and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingram Micro position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Ingram Micro vs. Perseus Mining Limited | Ingram Micro vs. Mangazeya Mining | Ingram Micro vs. Sweetgreen | Ingram Micro vs. Cleantech Power Corp |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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