Correlation Between Ingevity Corp and Badger Infrastructure
Can any of the company-specific risk be diversified away by investing in both Ingevity Corp and Badger Infrastructure 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 Badger Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingevity Corp and Badger Infrastructure Solutions, you can compare the effects of market volatilities on Ingevity Corp and Badger Infrastructure 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 Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingevity Corp and Badger Infrastructure.
Diversification Opportunities for Ingevity Corp and Badger Infrastructure
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingevity and Badger is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ingevity Corp and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure 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 Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Ingevity Corp i.e., Ingevity Corp and Badger Infrastructure go up and down completely randomly.
Pair Corralation between Ingevity Corp and Badger Infrastructure
Given the investment horizon of 90 days Ingevity Corp is expected to generate 1.84 times more return on investment than Badger Infrastructure. However, Ingevity Corp is 1.84 times more volatile than Badger Infrastructure Solutions. It trades about 0.1 of its potential returns per unit of risk. Badger Infrastructure Solutions is currently generating about 0.0 per unit of risk. If you would invest 4,042 in Ingevity Corp on August 28, 2024 and sell it today you would earn a total of 709.00 from holding Ingevity Corp or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Ingevity Corp vs. Badger Infrastructure Solution
Performance |
| Timeline |
| Ingevity Corp |
| Badger Infrastructure |
Ingevity Corp and Badger Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingevity Corp and Badger Infrastructure
The main advantage of trading using opposite Ingevity Corp and Badger Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingevity Corp position performs unexpectedly, Badger Infrastructure 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 Badger Infrastructure will offset losses from the drop in Badger Infrastructure's long position.| Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Minerals Technologies | Ingevity Corp vs. Quaker Chemical | Ingevity Corp vs. Oil Dri |
| Badger Infrastructure vs. ACS Actividades De | Badger Infrastructure vs. Arcadis NV | Badger Infrastructure vs. Acciona SA | Badger Infrastructure vs. JGC 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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