Correlation Between Worthington Industries and IBC Advanced
Can any of the company-specific risk be diversified away by investing in both Worthington Industries and IBC Advanced 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 Worthington Industries and IBC Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Industries and IBC Advanced Alloys, you can compare the effects of market volatilities on Worthington Industries and IBC Advanced 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 Worthington Industries with a short position of IBC Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Industries and IBC Advanced.
Diversification Opportunities for Worthington Industries and IBC Advanced
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Worthington and IBC is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Industries and IBC Advanced Alloys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBC Advanced Alloys and Worthington Industries 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 Worthington Industries are associated (or correlated) with IBC Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBC Advanced Alloys has no effect on the direction of Worthington Industries i.e., Worthington Industries and IBC Advanced go up and down completely randomly.
Pair Corralation between Worthington Industries and IBC Advanced
Considering the 90-day investment horizon Worthington Industries is expected to generate 0.87 times more return on investment than IBC Advanced. However, Worthington Industries is 1.15 times less risky than IBC Advanced. It trades about -0.01 of its potential returns per unit of risk. IBC Advanced Alloys is currently generating about -0.22 per unit of risk. If you would invest 4,091 in Worthington Industries on September 24, 2024 and sell it today you would lose (63.50) from holding Worthington Industries or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Worthington Industries vs. IBC Advanced Alloys
Performance |
| Timeline |
| Worthington Industries |
| IBC Advanced Alloys |
Worthington Industries and IBC Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Industries and IBC Advanced
The main advantage of trading using opposite Worthington Industries and IBC Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Industries position performs unexpectedly, IBC Advanced 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 IBC Advanced will offset losses from the drop in IBC Advanced's long position.| Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries | Worthington Industries vs. Northwest Pipe | Worthington Industries vs. Gulf Island Fabrication |
| IBC Advanced vs. ESAB Corp | IBC Advanced vs. Worthington Industries | IBC Advanced vs. Allegheny Technologies Incorporated | IBC Advanced vs. Insteel Industries |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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