Correlation Between Ingredion Incorporated and Public Service
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and Public Service 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 Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Public Service, you can compare the effects of market volatilities on Ingredion Incorporated and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Public Service.
Diversification Opportunities for Ingredion Incorporated and Public Service
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ingredion and Public is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Public Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Public Service go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Public Service
Given the investment horizon of 90 days Ingredion Incorporated is expected to under-perform the Public Service. But the stock apears to be less risky and, when comparing its historical volatility, Ingredion Incorporated is 1.1 times less risky than Public Service. The stock trades about -0.49 of its potential returns per unit of risk. The Public Service is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 7,681 in Public Service on October 12, 2024 and sell it today you would lose (181.00) from holding Public Service or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ingredion Incorporated vs. Public Service
Performance |
| Timeline |
| Ingredion Incorporated |
| Public Service |
Ingredion Incorporated and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Public Service
The main advantage of trading using opposite Ingredion Incorporated and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service'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 |
| Public Service vs. WK Kellogg Co | Public Service vs. Copperbank Resources Corp | Public Service vs. Astral Foods Limited | Public Service vs. Ingredion Incorporated |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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