Correlation Between Ingredion Incorporated and First Horizon

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

By analyzing existing cross correlation between Ingredion Incorporated and First Horizon, you can compare the effects of market volatilities on Ingredion Incorporated and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and First Horizon.

Diversification Opportunities for Ingredion Incorporated and First Horizon

0.27

Correlation Coefficient

Ingredion Incorporated  First Horizon

Modest diversification

The 3 months correlation between Ingredion and First is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and First Horizon go up and down completely randomly.

Pair Corralation between Ingredion Incorporated and First Horizon

Given the investment horizon of 90 days Ingredion Incorporated is expected to under-perform the First Horizon. In addition to that, Ingredion Incorporated is 2.65 times more volatile than First Horizon. It trades about -0.49 of its total potential returns per unit of risk. First Horizon is currently generating about 0.16 per unit of volatility. If you would invest  2,537  in First Horizon on October 12, 2024 and sell it today you would earn a total of  22.00  from holding First Horizon or generate 0.87% return on investment over 90 days.

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

Ingredion Incorporated  vs.  First Horizon

Ingredion Incorporated

Risk-Adjusted Performance

0 of 100

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.

First Horizon

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Horizon are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, First Horizon is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ingredion Incorporated and First Horizon

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

The idea behind Ingredion Incorporated and First Horizon 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.