Correlation Between Ingersoll Rand and Laser Photonics
Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand and Laser Photonics 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 Laser Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and Laser Photonics, you can compare the effects of market volatilities on Ingersoll Rand and Laser Photonics 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 Laser Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Laser Photonics.
Diversification Opportunities for Ingersoll Rand and Laser Photonics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ingersoll and Laser is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Laser Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laser Photonics 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 Laser Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laser Photonics has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and Laser Photonics go up and down completely randomly.
Pair Corralation between Ingersoll Rand and Laser Photonics
Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 0.5 times more return on investment than Laser Photonics. However, Ingersoll Rand is 1.99 times less risky than Laser Photonics. It trades about -0.23 of its potential returns per unit of risk. Laser Photonics is currently generating about -0.31 per unit of risk. If you would invest 9,380 in Ingersoll Rand on December 2, 2024 and sell it today you would lose (902.00) from holding Ingersoll Rand or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingersoll Rand vs. Laser Photonics
Performance |
| Timeline |
| Ingersoll Rand |
| Laser Photonics |
Ingersoll Rand and Laser Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingersoll Rand and Laser Photonics
The main advantage of trading using opposite Ingersoll Rand and Laser Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand position performs unexpectedly, Laser Photonics 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 Laser Photonics will offset losses from the drop in Laser Photonics' long position.| Ingersoll Rand vs. IDEX Corporation | Ingersoll Rand vs. Flowserve | Ingersoll Rand vs. Donaldson | Ingersoll Rand vs. Franklin Electric Co |
| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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