Correlation Between BigBearai Holdings and INGERSOLL

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

By analyzing existing cross correlation between BigBearai Holdings and INGERSOLL RAND GLOBAL HLDG, you can compare the effects of market volatilities on BigBearai Holdings and INGERSOLL 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 BigBearai Holdings with a short position of INGERSOLL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and INGERSOLL.

Diversification Opportunities for BigBearai Holdings and INGERSOLL

-0.53

Correlation Coefficient

BigBearai Holdings  INGERSOLL

Excellent diversification

The 3 months correlation between BigBearai and INGERSOLL is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and INGERSOLL RAND GLOBAL HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND GLOBAL and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND GLOBAL has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and INGERSOLL go up and down completely randomly.

Pair Corralation between BigBearai Holdings and INGERSOLL

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 53.96 times more return on investment than INGERSOLL. However, BigBearai Holdings is 53.96 times more volatile than INGERSOLL RAND GLOBAL HLDG. It trades about 0.21 of its potential returns per unit of risk. INGERSOLL RAND GLOBAL HLDG is currently generating about -0.04 per unit of risk. If you would invest  209.00  in BigBearai Holdings on September 21, 2024 and sell it today you would earn a total of  102.00  from holding BigBearai Holdings or generate 48.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

BigBearai Holdings  vs.  INGERSOLL RAND GLOBAL HLDG

BigBearai Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

INGERSOLL RAND GLOBAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGERSOLL RAND GLOBAL HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INGERSOLL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BigBearai Holdings and INGERSOLL

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

The idea behind BigBearai Holdings and INGERSOLL RAND GLOBAL HLDG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.