Correlation Between Nantex Industry and Ingentec

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

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

Diversification Opportunities for Nantex Industry and Ingentec

0.77

Correlation Coefficient

Nantex Industry  Ingentec

Poor diversification

The 3 months correlation between Nantex and Ingentec is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nantex Industry Co and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Nantex Industry 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 Nantex Industry Co are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Nantex Industry i.e., Nantex Industry and Ingentec go up and down completely randomly.

Pair Corralation between Nantex Industry and Ingentec

Assuming the 90 days trading horizon Nantex Industry Co is expected to under-perform the Ingentec. But the stock apears to be less risky and, when comparing its historical volatility, Nantex Industry Co is 1.78 times less risky than Ingentec. The stock trades about -0.02 of its potential returns per unit of risk. The Ingentec is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,836  in Ingentec on September 12, 2024 and sell it today you would lose (286.00) from holding Ingentec or give up 1.52% of portfolio value over 90 days.

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

Nantex Industry Co  vs.  Ingentec

Nantex Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nantex Industry Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ingentec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingentec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Nantex Industry and Ingentec

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

The idea behind Nantex Industry Co and Ingentec 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.