Correlation Between Ingevity Corp and Passur Aerospace
Can any of the company-specific risk be diversified away by investing in both Ingevity Corp and Passur Aerospace 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 Passur Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingevity Corp and Passur Aerospace, you can compare the effects of market volatilities on Ingevity Corp and Passur Aerospace 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 Passur Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingevity Corp and Passur Aerospace.
Diversification Opportunities for Ingevity Corp and Passur Aerospace
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingevity and Passur is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ingevity Corp and Passur Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passur Aerospace 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 Passur Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passur Aerospace has no effect on the direction of Ingevity Corp i.e., Ingevity Corp and Passur Aerospace go up and down completely randomly.
Pair Corralation between Ingevity Corp and Passur Aerospace
Given the investment horizon of 90 days Ingevity Corp is expected to under-perform the Passur Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Ingevity Corp is 30.16 times less risky than Passur Aerospace. The stock trades about -0.02 of its potential returns per unit of risk. The Passur Aerospace is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Passur Aerospace on August 29, 2024 and sell it today you would lose (16.50) from holding Passur Aerospace or give up 91.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingevity Corp vs. Passur Aerospace
Performance |
| Timeline |
| Ingevity Corp |
| Passur Aerospace |
Ingevity Corp and Passur Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingevity Corp and Passur Aerospace
The main advantage of trading using opposite Ingevity Corp and Passur Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingevity Corp position performs unexpectedly, Passur Aerospace 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 Passur Aerospace will offset losses from the drop in Passur Aerospace's long position.| Ingevity Corp vs. H B Fuller | Ingevity Corp vs. Minerals Technologies | Ingevity Corp vs. Quaker Chemical | Ingevity Corp vs. Oil Dri |
| Passur Aerospace vs. Element Solutions | Passur Aerospace vs. Orion Engineered Carbons | Passur Aerospace vs. Minerals Technologies | Passur Aerospace 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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