Correlation Between Ingredion Incorporated and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and Adecoagro 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 Ingredion Incorporated and Adecoagro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Adecoagro SA, you can compare the effects of market volatilities on Ingredion Incorporated and Adecoagro 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 Ingredion Incorporated with a short position of Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Adecoagro.
Diversification Opportunities for Ingredion Incorporated and Adecoagro
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ingredion and Adecoagro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA and Ingredion Incorporated 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 Ingredion Incorporated are associated (or correlated) with Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Adecoagro go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Adecoagro
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 0.62 times more return on investment than Adecoagro. However, Ingredion Incorporated is 1.61 times less risky than Adecoagro. It trades about 0.08 of its potential returns per unit of risk. Adecoagro SA is currently generating about 0.05 per unit of risk. If you would invest 9,321 in Ingredion Incorporated on August 31, 2024 and sell it today you would earn a total of 5,413 from holding Ingredion Incorporated or generate 58.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ingredion Incorporated vs. Adecoagro SA
Performance |
| Timeline |
| Ingredion Incorporated |
| Adecoagro SA |
Ingredion Incorporated and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Adecoagro
The main advantage of trading using opposite Ingredion Incorporated and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| Adecoagro vs. Limoneira Co | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods | Adecoagro vs. Fresh Del Monte |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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