Correlation Between Ingersoll Rand and Alpha Pro
Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand and Alpha Pro 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 Ingersoll Rand and Alpha Pro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and Alpha Pro Tech, you can compare the effects of market volatilities on Ingersoll Rand and Alpha Pro 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 Ingersoll Rand with a short position of Alpha Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Alpha Pro.
Diversification Opportunities for Ingersoll Rand and Alpha Pro
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingersoll and Alpha is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Alpha Pro Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Pro Tech and Ingersoll Rand 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 Ingersoll Rand are associated (or correlated) with Alpha Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Pro Tech has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and Alpha Pro go up and down completely randomly.
Pair Corralation between Ingersoll Rand and Alpha Pro
Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 0.6 times more return on investment than Alpha Pro. However, Ingersoll Rand is 1.68 times less risky than Alpha Pro. It trades about 0.05 of its potential returns per unit of risk. Alpha Pro Tech is currently generating about 0.0 per unit of risk. If you would invest 9,125 in Ingersoll Rand on August 27, 2024 and sell it today you would earn a total of 1,275 from holding Ingersoll Rand or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingersoll Rand vs. Alpha Pro Tech
Performance |
| Timeline |
| Ingersoll Rand |
| Alpha Pro Tech |
Ingersoll Rand and Alpha Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingersoll Rand and Alpha Pro
The main advantage of trading using opposite Ingersoll Rand and Alpha Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand position performs unexpectedly, Alpha Pro 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 Alpha Pro will offset losses from the drop in Alpha Pro's long position.| Ingersoll Rand vs. IDEX Corporation | Ingersoll Rand vs. Flowserve | Ingersoll Rand vs. Donaldson | Ingersoll Rand vs. Franklin Electric Co |
| Alpha Pro vs. Trex Company | Alpha Pro vs. Quanex Building Products | Alpha Pro vs. Armstrong World Industries | Alpha Pro vs. Gibraltar Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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