Correlation Between Universal Security and Ingram Micro
Can any of the company-specific risk be diversified away by investing in both Universal Security and Ingram Micro 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 Universal Security and Ingram Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Security Instruments and Ingram Micro Holding, you can compare the effects of market volatilities on Universal Security and Ingram Micro 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 Universal Security with a short position of Ingram Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Security and Ingram Micro.
Diversification Opportunities for Universal Security and Ingram Micro
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Ingram is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Universal Security Instruments and Ingram Micro Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingram Micro Holding and Universal Security 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 Universal Security Instruments are associated (or correlated) with Ingram Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingram Micro Holding has no effect on the direction of Universal Security i.e., Universal Security and Ingram Micro go up and down completely randomly.
Pair Corralation between Universal Security and Ingram Micro
Considering the 90-day investment horizon Universal Security Instruments is expected to generate 6.61 times more return on investment than Ingram Micro. However, Universal Security is 6.61 times more volatile than Ingram Micro Holding. It trades about 0.22 of its potential returns per unit of risk. Ingram Micro Holding is currently generating about -0.23 per unit of risk. If you would invest 141.00 in Universal Security Instruments on August 27, 2024 and sell it today you would earn a total of 73.00 from holding Universal Security Instruments or generate 51.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Security Instruments vs. Ingram Micro Holding
Performance |
| Timeline |
| Universal Security |
| Ingram Micro Holding |
Universal Security and Ingram Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Security and Ingram Micro
The main advantage of trading using opposite Universal Security and Ingram Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Security position performs unexpectedly, Ingram Micro 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 Ingram Micro will offset losses from the drop in Ingram Micro's long position.| Universal Security vs. Brinks Company | Universal Security vs. MSA Safety | Universal Security vs. Resideo Technologies | Universal Security vs. Mistras Group |
| Ingram Micro vs. Arrow Electronics | Ingram Micro vs. Avnet Inc | Ingram Micro vs. ICZOOM Group Class | Ingram Micro vs. Synnex |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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