Correlation Between Discover Financial and INGEVITY
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By analyzing existing cross correlation between Discover Financial Services and INGEVITY P 3875, you can compare the effects of market volatilities on Discover Financial and INGEVITY 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 Discover Financial with a short position of INGEVITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and INGEVITY.
Diversification Opportunities for Discover Financial and INGEVITY
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Discover and INGEVITY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and INGEVITY P 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGEVITY P 3875 and Discover Financial 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 Discover Financial Services are associated (or correlated) with INGEVITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGEVITY P 3875 has no effect on the direction of Discover Financial i.e., Discover Financial and INGEVITY go up and down completely randomly.
Pair Corralation between Discover Financial and INGEVITY
Considering the 90-day investment horizon Discover Financial Services is expected to generate 2.39 times more return on investment than INGEVITY. However, Discover Financial is 2.39 times more volatile than INGEVITY P 3875. It trades about 0.1 of its potential returns per unit of risk. INGEVITY P 3875 is currently generating about -0.15 per unit of risk. If you would invest 14,191 in Discover Financial Services on September 20, 2024 and sell it today you would earn a total of 2,635 from holding Discover Financial Services or generate 18.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 92.06% |
Values | Daily Returns |
Discover Financial Services vs. INGEVITY P 3875
Performance |
Timeline |
Discover Financial |
INGEVITY P 3875 |
Discover Financial and INGEVITY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Discover Financial and INGEVITY
The main advantage of trading using opposite Discover Financial and INGEVITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, INGEVITY 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 INGEVITY will offset losses from the drop in INGEVITY's long position.Discover Financial vs. Visa Class A | ||
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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