Correlation Between Ingredion Incorporated and United Parks
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and United Parks Resorts, you can compare the effects of market volatilities on Ingredion Incorporated and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and United Parks.
Diversification Opportunities for Ingredion Incorporated and United Parks
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingredion and United is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and United Parks go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and United Parks
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 0.63 times more return on investment than United Parks. However, Ingredion Incorporated is 1.59 times less risky than United Parks. It trades about 0.06 of its potential returns per unit of risk. United Parks Resorts is currently generating about 0.0 per unit of risk. If you would invest 9,286 in Ingredion Incorporated on December 12, 2024 and sell it today you would earn a total of 3,628 from holding Ingredion Incorporated or generate 39.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ingredion Incorporated vs. United Parks Resorts
Performance |
| Timeline |
| Ingredion Incorporated |
| United Parks Resorts |
Ingredion Incorporated and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and United Parks
The main advantage of trading using opposite Ingredion Incorporated and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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