Correlation Between Ingevity Corp and Air France
Can any of the company-specific risk be diversified away by investing in both Ingevity Corp and Air France 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 Ingevity Corp and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingevity Corp and Air France KLM, you can compare the effects of market volatilities on Ingevity Corp and Air France 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 Ingevity Corp with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingevity Corp and Air France.
Diversification Opportunities for Ingevity Corp and Air France
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingevity and Air is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ingevity Corp and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Ingevity Corp 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 Ingevity Corp are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Ingevity Corp i.e., Ingevity Corp and Air France go up and down completely randomly.
Pair Corralation between Ingevity Corp and Air France
Given the investment horizon of 90 days Ingevity Corp is expected to generate 1.75 times more return on investment than Air France. However, Ingevity Corp is 1.75 times more volatile than Air France KLM. It trades about 0.37 of its potential returns per unit of risk. Air France KLM is currently generating about -0.44 per unit of risk. If you would invest 3,574 in Ingevity Corp on August 27, 2024 and sell it today you would earn a total of 1,447 from holding Ingevity Corp or generate 40.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingevity Corp vs. Air France KLM
Performance |
| Timeline |
| Ingevity Corp |
| Air France KLM |
Ingevity Corp and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingevity Corp and Air France
The main advantage of trading using opposite Ingevity Corp and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingevity Corp position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Ingevity Corp vs. Oil Dri | Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Northern Technologies | Ingevity Corp vs. Cabot |
| Air France vs. Element Solutions | Air France vs. Orion Engineered Carbons | Air France vs. Minerals Technologies | Air France vs. Ingevity 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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