Correlation Between SPACE and Ingersoll Rand

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

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

Diversification Opportunities for SPACE and Ingersoll Rand

0.52

Correlation Coefficient

SPACE  Ingersoll Rand

Very weak diversification

The 3 months correlation between SPACE and Ingersoll is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand and SPACE 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 SPACE are associated (or correlated) with Ingersoll Rand. 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 has no effect on the direction of SPACE i.e., SPACE and Ingersoll Rand go up and down completely randomly.

Pair Corralation between SPACE and Ingersoll Rand

Assuming the 90 days horizon SPACE is expected to under-perform the Ingersoll Rand. In addition to that, SPACE is 3.73 times more volatile than Ingersoll Rand. It trades about -0.12 of its total potential returns per unit of risk. Ingersoll Rand is currently generating about -0.11 per unit of volatility. If you would invest  9,050  in Ingersoll Rand on December 29, 2024 and sell it today you would lose (1,106) from holding Ingersoll Rand or give up 12.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

SPACE  vs.  Ingersoll Rand

SPACE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPACE 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 Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for SPACE shareholders.

Ingersoll Rand

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ingersoll Rand has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with SPACE and Ingersoll Rand

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

The idea behind SPACE and Ingersoll Rand 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.