Correlation Between INTNED and Reynolds Consumer

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

By analyzing existing cross correlation between INTNED 61032 28 MAR 26 and Reynolds Consumer Products, you can compare the effects of market volatilities on INTNED and Reynolds Consumer 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 INTNED with a short position of Reynolds Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Reynolds Consumer.

Diversification Opportunities for INTNED and Reynolds Consumer

0.03

Correlation Coefficient

INTNED  Reynolds Consumer

Significant diversification

The 3 months correlation between INTNED and Reynolds is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 61032 28 MAR 26 and Reynolds Consumer Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reynolds Consumer and INTNED 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 INTNED 61032 28 MAR 26 are associated (or correlated) with Reynolds Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reynolds Consumer has no effect on the direction of INTNED i.e., INTNED and Reynolds Consumer go up and down completely randomly.

Pair Corralation between INTNED and Reynolds Consumer

Assuming the 90 days trading horizon INTNED is expected to generate 1.39 times less return on investment than Reynolds Consumer. But when comparing it to its historical volatility, INTNED 61032 28 MAR 26 is 1.88 times less risky than Reynolds Consumer. It trades about 0.01 of its potential returns per unit of risk. Reynolds Consumer Products is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,663  in Reynolds Consumer Products on October 5, 2024 and sell it today you would earn a total of  19.00  from holding Reynolds Consumer Products or generate 0.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	45.59%
Values	Daily Returns

INTNED 61032 28 MAR 26  vs.  Reynolds Consumer Products

INTNED 61032 28

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTNED 61032 28 MAR 26 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Reynolds Consumer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reynolds Consumer Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with INTNED and Reynolds Consumer

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

The idea behind INTNED 61032 28 MAR 26 and Reynolds Consumer Products 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.