Correlation Between WESCO International and Ingram Micro
Can any of the company-specific risk be diversified away by investing in both WESCO International 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 WESCO International and Ingram Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESCO International and Ingram Micro Holding, you can compare the effects of market volatilities on WESCO International 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 WESCO International with a short position of Ingram Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESCO International and Ingram Micro.
Diversification Opportunities for WESCO International and Ingram Micro
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between WESCO and Ingram is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding WESCO International 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 WESCO International 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 WESCO International 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 WESCO International i.e., WESCO International and Ingram Micro go up and down completely randomly.
Pair Corralation between WESCO International and Ingram Micro
Assuming the 90 days trading horizon WESCO International is expected to generate 0.08 times more return on investment than Ingram Micro. However, WESCO International is 12.32 times less risky than Ingram Micro. It trades about 0.2 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 2,596 in WESCO International on August 27, 2024 and sell it today you would earn a total of 15.00 from holding WESCO International or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WESCO International vs. Ingram Micro Holding
Performance |
| Timeline |
| WESCO International |
| Ingram Micro Holding |
WESCO International and Ingram Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESCO International and Ingram Micro
The main advantage of trading using opposite WESCO International and Ingram Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESCO International 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.| WESCO International vs. SiriusPoint | WESCO International vs. Argo Group International | WESCO International vs. Global Ship Lease | WESCO International vs. Compass Diversified |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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