Correlation Between Ingress Industrial and Sena Development

Can any of the company-specific risk be diversified away by investing in both Ingress Industrial and Sena Development 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 Ingress Industrial and Sena Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ingress Industrial Public and Sena Development Public, you can compare the effects of market volatilities on Ingress Industrial and Sena Development 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 Ingress Industrial with a short position of Sena Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingress Industrial and Sena Development.

Diversification Opportunities for Ingress Industrial and Sena Development

0.75

Correlation Coefficient

Ingress Industrial  Sena Development

Poor diversification

The 3 months correlation between Ingress and Sena is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ingress Industrial Public and Sena Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sena Development Public and Ingress Industrial 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 Ingress Industrial Public are associated (or correlated) with Sena Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sena Development Public has no effect on the direction of Ingress Industrial i.e., Ingress Industrial and Sena Development go up and down completely randomly.

Pair Corralation between Ingress Industrial and Sena Development

Assuming the 90 days trading horizon Ingress Industrial Public is expected to under-perform the Sena Development. But the stock apears to be less risky and, when comparing its historical volatility, Ingress Industrial Public is 11.57 times less risky than Sena Development. The stock trades about -0.01 of its potential returns per unit of risk. The Sena Development Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  357.00  in Sena Development Public on October 11, 2024 and sell it today you would lose (137.00) from holding Sena Development Public or give up 38.38% of portfolio value over 90 days.

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

Ingress Industrial Public  vs.  Sena Development Public

Ingress Industrial Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingress Industrial Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sena Development Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sena Development Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Ingress Industrial and Sena Development

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

The idea behind Ingress Industrial Public and Sena Development Public 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.