Correlation Between Ingredion Incorporated and BRC
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and BRC 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 BRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and BRC Inc, you can compare the effects of market volatilities on Ingredion Incorporated and BRC 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 BRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and BRC.
Diversification Opportunities for Ingredion Incorporated and BRC
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ingredion and BRC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and BRC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRC Inc 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 BRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRC Inc has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and BRC go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and BRC
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 1.38 times more return on investment than BRC. However, Ingredion Incorporated is 1.38 times more volatile than BRC Inc. It trades about 0.14 of its potential returns per unit of risk. BRC Inc is currently generating about -0.14 per unit of risk. If you would invest 13,484 in Ingredion Incorporated on August 27, 2024 and sell it today you would earn a total of 1,344 from holding Ingredion Incorporated or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. BRC Inc
Performance |
| Timeline |
| Ingredion Incorporated |
| BRC Inc |
Ingredion Incorporated and BRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and BRC
The main advantage of trading using opposite Ingredion Incorporated and BRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, BRC 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 BRC will offset losses from the drop in BRC'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 |
| BRC vs. Bellring Brands LLC | BRC vs. Ingredion Incorporated | BRC vs. Nomad Foods | BRC vs. Simply Good Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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