Correlation Between Design Therapeutics and INGERSOLL

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

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

Diversification Opportunities for Design Therapeutics and INGERSOLL

0.54

Correlation Coefficient

Design Therapeutics  INGERSOLL

Very weak diversification

The 3 months correlation between Design and INGERSOLL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics 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 Design Therapeutics 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 Design Therapeutics 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 Design Therapeutics i.e., Design Therapeutics and INGERSOLL go up and down completely randomly.

Pair Corralation between Design Therapeutics and INGERSOLL

Given the investment horizon of 90 days Design Therapeutics is expected to under-perform the INGERSOLL. In addition to that, Design Therapeutics is 7.49 times more volatile than INGERSOLL RAND GLOBAL HLDG. It trades about -0.05 of its total potential returns per unit of risk. INGERSOLL RAND GLOBAL HLDG is currently generating about 0.07 per unit of volatility. If you would invest  10,174  in INGERSOLL RAND GLOBAL HLDG on December 25, 2024 and sell it today you would earn a total of  167.00  from holding INGERSOLL RAND GLOBAL HLDG or generate 1.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.54%
Values	Daily Returns

Design Therapeutics  vs.  INGERSOLL RAND GLOBAL HLDG

Design Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Design Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

INGERSOLL RAND GLOBAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INGERSOLL RAND GLOBAL HLDG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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 Design Therapeutics and INGERSOLL

The main advantage of trading using opposite Design Therapeutics and INGERSOLL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics 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 Design Therapeutics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.