Correlation Between Mamas Creations and Ingredion Incorporated
Can any of the company-specific risk be diversified away by investing in both Mamas Creations and Ingredion Incorporated 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 Mamas Creations and Ingredion Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mamas Creations and Ingredion Incorporated, you can compare the effects of market volatilities on Mamas Creations and Ingredion Incorporated 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 Mamas Creations with a short position of Ingredion Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mamas Creations and Ingredion Incorporated.
Diversification Opportunities for Mamas Creations and Ingredion Incorporated
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mamas and Ingredion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and Ingredion Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingredion Incorporated and Mamas Creations 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 Mamas Creations are associated (or correlated) with Ingredion Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingredion Incorporated has no effect on the direction of Mamas Creations i.e., Mamas Creations and Ingredion Incorporated go up and down completely randomly.
Pair Corralation between Mamas Creations and Ingredion Incorporated
Given the investment horizon of 90 days Mamas Creations is expected to generate 3.81 times more return on investment than Ingredion Incorporated. However, Mamas Creations is 3.81 times more volatile than Ingredion Incorporated. It trades about 0.01 of its potential returns per unit of risk. Ingredion Incorporated is currently generating about 0.0 per unit of risk. If you would invest 777.00 in Mamas Creations on November 4, 2024 and sell it today you would lose (7.00) from holding Mamas Creations or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mamas Creations vs. Ingredion Incorporated
Performance |
| Timeline |
| Mamas Creations |
| Ingredion Incorporated |
Mamas Creations and Ingredion Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mamas Creations and Ingredion Incorporated
The main advantage of trading using opposite Mamas Creations and Ingredion Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations position performs unexpectedly, Ingredion Incorporated 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 Ingredion Incorporated will offset losses from the drop in Ingredion Incorporated's long position.| Mamas Creations vs. Griffon | Mamas Creations vs. Fomento Economico Mexicano | Mamas Creations vs. Highway Holdings Limited | Mamas Creations vs. Eldorado Gold Corp |
| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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