Correlation Between AYR Strategies and INC Research

Can any of the company-specific risk be diversified away by investing in both AYR Strategies and INC Research 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 AYR Strategies and INC Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AYR Strategies Class and INC Research Holdings, you can compare the effects of market volatilities on AYR Strategies and INC Research 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 AYR Strategies with a short position of INC Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of AYR Strategies and INC Research.

Diversification Opportunities for AYR Strategies and INC Research

0.65

Correlation Coefficient

AYR Strategies  INC Research

Poor diversification

The 3 months correlation between AYR and INC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AYR Strategies Class and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings and AYR Strategies 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 AYR Strategies Class are associated (or correlated) with INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of AYR Strategies i.e., AYR Strategies and INC Research go up and down completely randomly.

Pair Corralation between AYR Strategies and INC Research

Assuming the 90 days horizon AYR Strategies Class is expected to under-perform the INC Research. In addition to that, AYR Strategies is 2.28 times more volatile than INC Research Holdings. It trades about -0.27 of its total potential returns per unit of risk. INC Research Holdings is currently generating about -0.15 per unit of volatility. If you would invest  174.00  in INC Research Holdings on August 30, 2024 and sell it today you would lose (39.00) from holding INC Research Holdings or give up 22.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

AYR Strategies Class  vs.  INC Research Holdings

AYR Strategies Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AYR Strategies Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

INC Research Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INC Research Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with AYR Strategies and INC Research

The main advantage of trading using opposite AYR Strategies and INC Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AYR Strategies position performs unexpectedly, INC Research 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 INC Research will offset losses from the drop in INC Research's long position.

The idea behind AYR Strategies Class and INC Research Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.