Correlation Between Ingredion Incorporated and Turning Point
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and Turning Point 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 Turning Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Turning Point Brands, you can compare the effects of market volatilities on Ingredion Incorporated and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Turning Point.
Diversification Opportunities for Ingredion Incorporated and Turning Point
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ingredion and Turning is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Turning Point go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Turning Point
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 6.09 times less return on investment than Turning Point. But when comparing it to its historical volatility, Ingredion Incorporated is 2.52 times less risky than Turning Point. It trades about 0.04 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,065 in Turning Point Brands on November 2, 2024 and sell it today you would earn a total of 235.00 from holding Turning Point Brands or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. Turning Point Brands
Performance |
| Timeline |
| Ingredion Incorporated |
| Turning Point Brands |
Ingredion Incorporated and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Turning Point
The main advantage of trading using opposite Ingredion Incorporated and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point'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 |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |