Correlation Between Ingersoll Rand and Schindler Holding
Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand and Schindler Holding 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 Schindler Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and Schindler Holding AG, you can compare the effects of market volatilities on Ingersoll Rand and Schindler Holding 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 Schindler Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Schindler Holding.
Diversification Opportunities for Ingersoll Rand and Schindler Holding
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ingersoll and Schindler is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Schindler Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Holding 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 Schindler Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Holding has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and Schindler Holding go up and down completely randomly.
Pair Corralation between Ingersoll Rand and Schindler Holding
Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 1.06 times more return on investment than Schindler Holding. However, Ingersoll Rand is 1.06 times more volatile than Schindler Holding AG. It trades about 0.07 of its potential returns per unit of risk. Schindler Holding AG is currently generating about 0.01 per unit of risk. If you would invest 9,000 in Ingersoll Rand on September 1, 2024 and sell it today you would earn a total of 1,417 from holding Ingersoll Rand or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ingersoll Rand vs. Schindler Holding AG
Performance |
| Timeline |
| Ingersoll Rand |
| Schindler Holding |
Ingersoll Rand and Schindler Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingersoll Rand and Schindler Holding
The main advantage of trading using opposite Ingersoll Rand and Schindler Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand position performs unexpectedly, Schindler Holding 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 Schindler Holding will offset losses from the drop in Schindler Holding's long position.The idea behind Ingersoll Rand and Schindler Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Schindler Holding vs. GE Aerospace | Schindler Holding vs. Eaton PLC | Schindler Holding vs. Siemens AG Class | Schindler Holding vs. Parker Hannifin |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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