Correlation Between INC Research and AYR Strategies

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

By analyzing existing cross correlation between INC Research Holdings and AYR Strategies Class, you can compare the effects of market volatilities on INC Research and AYR Strategies 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 INC Research with a short position of AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of INC Research and AYR Strategies.

Diversification Opportunities for INC Research and AYR Strategies

0.44

Correlation Coefficient

INC Research  AYR Strategies

Very weak diversification

The 3 months correlation between INC and AYR is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding INC Research Holdings and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class and INC Research 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 INC Research Holdings are associated (or correlated) with AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of INC Research i.e., INC Research and AYR Strategies go up and down completely randomly.

Pair Corralation between INC Research and AYR Strategies

Given the investment horizon of 90 days INC Research Holdings is expected to generate 0.29 times more return on investment than AYR Strategies. However, INC Research Holdings is 3.4 times less risky than AYR Strategies. It trades about -0.08 of its potential returns per unit of risk. AYR Strategies Class is currently generating about -0.15 per unit of risk. If you would invest  163.00  in INC Research Holdings on December 27, 2024 and sell it today you would lose (20.00) from holding INC Research Holdings or give up 12.27% of portfolio value over 90 days.

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

INC Research Holdings  vs.  AYR Strategies Class

INC Research Holdings

Risk-Adjusted Performance

Very Weak

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

AYR Strategies Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days AYR Strategies Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with INC Research and AYR Strategies

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

The idea behind INC Research Holdings and AYR Strategies Class 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.