Correlation Between Ingles Markets and Harbor Long

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

By analyzing existing cross correlation between Ingles Markets Incorporated and Harbor Long Term Growers, you can compare the effects of market volatilities on Ingles Markets and Harbor Long 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 Ingles Markets with a short position of Harbor Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and Harbor Long.

Diversification Opportunities for Ingles Markets and Harbor Long

0.65

Correlation Coefficient

Ingles Markets  Harbor Long

Poor diversification

The 3 months correlation between Ingles and Harbor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated and Harbor Long Term Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Long Term and Ingles Markets 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 Ingles Markets Incorporated are associated (or correlated) with Harbor Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Long Term has no effect on the direction of Ingles Markets i.e., Ingles Markets and Harbor Long go up and down completely randomly.

Pair Corralation between Ingles Markets and Harbor Long

Assuming the 90 days horizon Ingles Markets Incorporated is expected to generate 1.0 times more return on investment than Harbor Long. However, Ingles Markets is 1.0 times more volatile than Harbor Long Term Growers. It trades about 0.01 of its potential returns per unit of risk. Harbor Long Term Growers is currently generating about -0.12 per unit of risk. If you would invest  6,354  in Ingles Markets Incorporated on December 29, 2024 and sell it today you would earn a total of  25.00  from holding Ingles Markets Incorporated or generate 0.39% return on investment over 90 days.

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

Ingles Markets Incorporated  vs.  Harbor Long Term Growers

Ingles Markets

Risk-Adjusted Performance

Very Weak

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

Harbor Long Term

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harbor Long Term Growers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Ingles Markets and Harbor Long

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

The idea behind Ingles Markets Incorporated and Harbor Long Term Growers 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.