Correlation Between Ingredion Incorporated and Canon
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and Canon 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 Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Canon Inc ADR, you can compare the effects of market volatilities on Ingredion Incorporated and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Canon.
Diversification Opportunities for Ingredion Incorporated and Canon
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ingredion and Canon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Canon go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Canon
If you would invest 11,862 in Ingredion Incorporated on November 3, 2024 and sell it today you would earn a total of 1,782 from holding Ingredion Incorporated or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Ingredion Incorporated vs. Canon Inc ADR
Performance |
| Timeline |
| Ingredion Incorporated |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ingredion Incorporated and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Canon
The main advantage of trading using opposite Ingredion Incorporated and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon'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 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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