Correlation Between Ingredion Incorporated and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and Austevoll Seafood 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 Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Austevoll Seafood ASA, you can compare the effects of market volatilities on Ingredion Incorporated and Austevoll Seafood 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 Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Austevoll Seafood.
Diversification Opportunities for Ingredion Incorporated and Austevoll Seafood
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ingredion and Austevoll is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA 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 Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Austevoll Seafood
Given the investment horizon of 90 days Ingredion Incorporated is expected to under-perform the Austevoll Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Ingredion Incorporated is 1.3 times less risky than Austevoll Seafood. The stock trades about -0.01 of its potential returns per unit of risk. The Austevoll Seafood ASA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 880.00 in Austevoll Seafood ASA on December 12, 2024 and sell it today you would earn a total of 5.00 from holding Austevoll Seafood ASA or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Ingredion Incorporated |
| Austevoll Seafood ASA |
Ingredion Incorporated and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Austevoll Seafood
The main advantage of trading using opposite Ingredion Incorporated and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| Ingredion Incorporated vs. Lancaster Colony | ||
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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