Correlation Between INGERSOLL and Bill

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

By analyzing existing cross correlation between INGERSOLL RAND GLOBAL HLDG and Bill Com Holdings, you can compare the effects of market volatilities on INGERSOLL and Bill 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 INGERSOLL with a short position of Bill. Check out your portfolio center. Please also check ongoing floating volatility patterns of INGERSOLL and Bill.

Diversification Opportunities for INGERSOLL and Bill

-0.09

Correlation Coefficient

INGERSOLL  Bill

Good diversification

The 3 months correlation between INGERSOLL and Bill is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding INGERSOLL RAND GLOBAL HLDG and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and INGERSOLL 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 INGERSOLL RAND GLOBAL HLDG are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of INGERSOLL i.e., INGERSOLL and Bill go up and down completely randomly.

Pair Corralation between INGERSOLL and Bill

Assuming the 90 days trading horizon INGERSOLL RAND GLOBAL HLDG is expected to under-perform the Bill. But the bond apears to be less risky and, when comparing its historical volatility, INGERSOLL RAND GLOBAL HLDG is 2.28 times less risky than Bill. The bond trades about -0.01 of its potential returns per unit of risk. The Bill Com Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,723  in Bill Com Holdings on September 25, 2024 and sell it today you would earn a total of  988.50  from holding Bill Com Holdings or generate 12.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	49.6%
Values	Daily Returns

INGERSOLL RAND GLOBAL HLDG  vs.  Bill Com Holdings

INGERSOLL RAND GLOBAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGERSOLL RAND GLOBAL HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGERSOLL RAND GLOBAL HLDG investors.

Bill Com Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INGERSOLL and Bill

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

The idea behind INGERSOLL RAND GLOBAL HLDG and Bill Com Holdings 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.