Correlation Between Ingentec and Promise Technology
Can any of the company-specific risk be diversified away by investing in both Ingentec and Promise Technology 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 Ingentec and Promise Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Promise Technology, you can compare the effects of market volatilities on Ingentec and Promise Technology 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 Ingentec with a short position of Promise Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Promise Technology.
Diversification Opportunities for Ingentec and Promise Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingentec and Promise is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Promise Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promise Technology and Ingentec 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 Ingentec are associated (or correlated) with Promise Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promise Technology has no effect on the direction of Ingentec i.e., Ingentec and Promise Technology go up and down completely randomly.
Pair Corralation between Ingentec and Promise Technology
Assuming the 90 days trading horizon Ingentec is expected to under-perform the Promise Technology. In addition to that, Ingentec is 1.68 times more volatile than Promise Technology. It trades about -0.25 of its total potential returns per unit of risk. Promise Technology is currently generating about -0.11 per unit of volatility. If you would invest 1,230 in Promise Technology on September 23, 2024 and sell it today you would lose (105.00) from holding Promise Technology or give up 8.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ingentec vs. Promise Technology
Performance |
Timeline |
Ingentec |
Promise Technology |
Ingentec and Promise Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingentec and Promise Technology
The main advantage of trading using opposite Ingentec and Promise Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Promise Technology 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 Promise Technology will offset losses from the drop in Promise Technology's long position.Ingentec vs. Nan Ya Plastics | Ingentec vs. China Petrochemical Development | Ingentec vs. Eternal Materials Co | Ingentec vs. TSRC Corp |
Promise Technology vs. Century Wind Power | Promise Technology vs. Green World Fintech | Promise Technology vs. Ingentec | Promise Technology vs. Chaheng Precision Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Commodity Directory Find actively traded commodities issued by global exchanges |