Correlation Between Ingevity Corp and Caldwell Partners
Can any of the company-specific risk be diversified away by investing in both Ingevity Corp and Caldwell Partners 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 Caldwell Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingevity Corp and The Caldwell Partners, you can compare the effects of market volatilities on Ingevity Corp and Caldwell Partners 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 Caldwell Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingevity Corp and Caldwell Partners.
Diversification Opportunities for Ingevity Corp and Caldwell Partners
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingevity and Caldwell is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ingevity Corp and The Caldwell Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners 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 Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of Ingevity Corp i.e., Ingevity Corp and Caldwell Partners go up and down completely randomly.
Pair Corralation between Ingevity Corp and Caldwell Partners
Given the investment horizon of 90 days Ingevity Corp is expected to generate 1.1 times more return on investment than Caldwell Partners. However, Ingevity Corp is 1.1 times more volatile than The Caldwell Partners. It trades about 0.29 of its potential returns per unit of risk. The Caldwell Partners is currently generating about 0.08 per unit of risk. If you would invest 3,574 in Ingevity Corp on August 29, 2024 and sell it today you would earn a total of 1,177 from holding Ingevity Corp or generate 32.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingevity Corp vs. The Caldwell Partners
Performance |
| Timeline |
| Ingevity Corp |
| Caldwell Partners |
Ingevity Corp and Caldwell Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingevity Corp and Caldwell Partners
The main advantage of trading using opposite Ingevity Corp and Caldwell Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingevity Corp position performs unexpectedly, Caldwell Partners 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 Caldwell Partners will offset losses from the drop in Caldwell Partners' long position.| Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Minerals Technologies | Ingevity Corp vs. Quaker Chemical | Ingevity Corp vs. Oil Dri |
| Caldwell Partners vs. Deere Company | Caldwell Partners vs. Columbus McKinnon | Caldwell Partners vs. Hyster Yale Materials Handling | Caldwell Partners vs. Manitowoc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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