Correlation Between Ingredion Incorporated and Global E

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

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

Diversification Opportunities for Ingredion Incorporated and Global E

0.32

Correlation Coefficient

Ingredion Incorporated  Global E

Weak diversification

The 3 months correlation between Ingredion and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and Global E go up and down completely randomly.

Pair Corralation between Ingredion Incorporated and Global E

Given the investment horizon of 90 days Ingredion Incorporated is expected to under-perform the Global E. But the stock apears to be less risky and, when comparing its historical volatility, Ingredion Incorporated is 2.46 times less risky than Global E. The stock trades about -0.45 of its potential returns per unit of risk. The Global E Online is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,352  in Global E Online on October 11, 2024 and sell it today you would lose (74.00) from holding Global E Online or give up 1.38% of portfolio value over 90 days.

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

Ingredion Incorporated  vs.  Global E Online

Ingredion Incorporated

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ingredion Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Global E Online

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ingredion Incorporated and Global E

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

The idea behind Ingredion Incorporated and Global E Online 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.