Correlation Between Laser Photonics and Ingersoll Rand

Can any of the company-specific risk be diversified away by investing in both Laser Photonics and Ingersoll Rand 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 Laser Photonics and Ingersoll Rand into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Laser Photonics and Ingersoll Rand, you can compare the effects of market volatilities on Laser Photonics and Ingersoll Rand 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 Laser Photonics with a short position of Ingersoll Rand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and Ingersoll Rand.

Diversification Opportunities for Laser Photonics and Ingersoll Rand

0.0

Correlation Coefficient

Laser Photonics  Ingersoll Rand

Pay attention - limited upside

The 3 months correlation between Laser and Ingersoll is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand and Laser Photonics 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 Laser Photonics are associated (or correlated) with Ingersoll Rand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingersoll Rand has no effect on the direction of Laser Photonics i.e., Laser Photonics and Ingersoll Rand go up and down completely randomly.

Pair Corralation between Laser Photonics and Ingersoll Rand

Given the investment horizon of 90 days Laser Photonics is expected to generate 3.37 times more return on investment than Ingersoll Rand. However, Laser Photonics is 3.37 times more volatile than Ingersoll Rand. It trades about 0.15 of its potential returns per unit of risk. Ingersoll Rand is currently generating about 0.29 per unit of risk. If you would invest  476.00  in Laser Photonics on September 5, 2024 and sell it today you would earn a total of  74.00  from holding Laser Photonics or generate 15.55% return on investment over 90 days.

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

Laser Photonics  vs.  Ingersoll Rand

Laser Photonics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Laser Photonics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Laser Photonics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ingersoll Rand

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ingersoll Rand are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Ingersoll Rand reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Laser Photonics and Ingersoll Rand

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

The idea behind Laser Photonics and Ingersoll Rand 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.