Correlation Between Ingevity Corp and Entergy New
Can any of the company-specific risk be diversified away by investing in both Ingevity Corp and Entergy New 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 Entergy New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingevity Corp and Entergy New Orleans, you can compare the effects of market volatilities on Ingevity Corp and Entergy New 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 Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingevity Corp and Entergy New.
Diversification Opportunities for Ingevity Corp and Entergy New
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingevity and Entergy is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ingevity Corp and Entergy New Orleans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy New Orleans 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 Entergy New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy New Orleans has no effect on the direction of Ingevity Corp i.e., Ingevity Corp and Entergy New go up and down completely randomly.
Pair Corralation between Ingevity Corp and Entergy New
Given the investment horizon of 90 days Ingevity Corp is expected to under-perform the Entergy New. In addition to that, Ingevity Corp is 3.59 times more volatile than Entergy New Orleans. It trades about -0.02 of its total potential returns per unit of risk. Entergy New Orleans is currently generating about 0.03 per unit of volatility. If you would invest 2,080 in Entergy New Orleans on August 28, 2024 and sell it today you would earn a total of 265.00 from holding Entergy New Orleans or generate 12.74% 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. Entergy New Orleans
Performance |
| Timeline |
| Ingevity Corp |
| Entergy New Orleans |
Ingevity Corp and Entergy New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingevity Corp and Entergy New
The main advantage of trading using opposite Ingevity Corp and Entergy New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingevity Corp position performs unexpectedly, Entergy New 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 Entergy New will offset losses from the drop in Entergy New's long position.| Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Minerals Technologies | Ingevity Corp vs. Quaker Chemical | Ingevity Corp vs. Oil Dri |
| Entergy New vs. Entergy Arkansas LLC | Entergy New vs. Entergy New Orleans | Entergy New vs. Entergy Mississippi LLC | Entergy New vs. Southern Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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