Correlation Between Chukai Public and Ingress Industrial

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

By analyzing existing cross correlation between Chukai Public and Ingress Industrial Public, you can compare the effects of market volatilities on Chukai Public and Ingress Industrial 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 Chukai Public with a short position of Ingress Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chukai Public and Ingress Industrial.

Diversification Opportunities for Chukai Public and Ingress Industrial

0.83

Correlation Coefficient

Chukai Public  Ingress Industrial

Very poor diversification

The 3 months correlation between Chukai and Ingress is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chukai Public and Ingress Industrial Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingress Industrial Public and Chukai Public 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 Chukai Public are associated (or correlated) with Ingress Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingress Industrial Public has no effect on the direction of Chukai Public i.e., Chukai Public and Ingress Industrial go up and down completely randomly.

Pair Corralation between Chukai Public and Ingress Industrial

Assuming the 90 days trading horizon Chukai Public is expected to under-perform the Ingress Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Chukai Public is 1.02 times less risky than Ingress Industrial. The stock trades about -0.3 of its potential returns per unit of risk. The Ingress Industrial Public is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Ingress Industrial Public on September 14, 2024 and sell it today you would lose (3.00) from holding Ingress Industrial Public or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Chukai Public  vs.  Ingress Industrial Public

Chukai Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chukai Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ingress Industrial Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingress Industrial Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Chukai Public and Ingress Industrial

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

The idea behind Chukai Public and Ingress Industrial Public 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.