Correlation Between Ingredion Incorporated and 057224AK3

Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and 057224AK3 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 057224AK3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ingredion Incorporated and BHI 6875 15 JAN 29, you can compare the effects of market volatilities on Ingredion Incorporated and 057224AK3 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 057224AK3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and 057224AK3.

Diversification Opportunities for Ingredion Incorporated and 057224AK3

0.34

Correlation Coefficient

Ingredion Incorporated  057224AK3

Weak diversification

The 3 months correlation between Ingredion and 057224AK3 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and BHI 6875 15 JAN 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHI 6875 15 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 057224AK3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHI 6875 15 has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and 057224AK3 go up and down completely randomly.

Pair Corralation between Ingredion Incorporated and 057224AK3

Given the investment horizon of 90 days Ingredion Incorporated is expected to under-perform the 057224AK3. In addition to that, Ingredion Incorporated is 1.76 times more volatile than BHI 6875 15 JAN 29. It trades about -0.05 of its total potential returns per unit of risk. BHI 6875 15 JAN 29 is currently generating about 0.07 per unit of volatility. If you would invest  10,653  in BHI 6875 15 JAN 29 on December 26, 2024 and sell it today you would earn a total of  147.00  from holding BHI 6875 15 JAN 29 or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	48.33%
Values	Daily Returns

Ingredion Incorporated  vs.  BHI 6875 15 JAN 29

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.

BHI 6875 15

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BHI 6875 15 JAN 29 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 057224AK3 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ingredion Incorporated and 057224AK3

The main advantage of trading using opposite Ingredion Incorporated and 057224AK3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, 057224AK3 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 057224AK3 will offset losses from the drop in 057224AK3's long position.

The idea behind Ingredion Incorporated and BHI 6875 15 JAN 29 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.