Correlation Between Ingredion Incorporated and Bellring Brands

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

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

Diversification Opportunities for Ingredion Incorporated and Bellring Brands

0.13

Correlation Coefficient

Ingredion Incorporated  Bellring Brands

Average diversification

The 3 months correlation between Ingredion and Bellring is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Bellring Brands LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellring Brands LLC and Ingredion Incorporated 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 Ingredion Incorporated are associated (or correlated) with Bellring Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellring Brands LLC has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Bellring Brands go up and down completely randomly.

Pair Corralation between Ingredion Incorporated and Bellring Brands

Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 0.63 times more return on investment than Bellring Brands. However, Ingredion Incorporated is 1.58 times less risky than Bellring Brands. It trades about -0.01 of its potential returns per unit of risk. Bellring Brands LLC is currently generating about 0.0 per unit of risk. If you would invest  13,634  in Ingredion Incorporated on December 30, 2024 and sell it today you would lose (135.00) from holding Ingredion Incorporated or give up 0.99% of portfolio value over 90 days.

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

Ingredion Incorporated  vs.  Bellring Brands LLC

Ingredion Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ingredion Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Ingredion Incorporated is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bellring Brands LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bellring Brands LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Bellring Brands is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ingredion Incorporated and Bellring Brands

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

The idea behind Ingredion Incorporated and Bellring Brands LLC 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.