Correlation Between CENTRAL RETAIL and Ingress Industrial

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

By analyzing existing cross correlation between CENTRAL RETAIL P and Ingress Industrial Public, you can compare the effects of market volatilities on CENTRAL RETAIL and Ingress Industrial 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 CENTRAL RETAIL with a short position of Ingress Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTRAL RETAIL and Ingress Industrial.

Diversification Opportunities for CENTRAL RETAIL and Ingress Industrial

0.08

Correlation Coefficient

CENTRAL RETAIL  Ingress Industrial

Significant diversification

The 3 months correlation between CENTRAL and Ingress is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CENTRAL RETAIL P and Ingress Industrial Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingress Industrial Public and CENTRAL RETAIL 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 CENTRAL RETAIL P are associated (or correlated) with Ingress Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingress Industrial Public has no effect on the direction of CENTRAL RETAIL i.e., CENTRAL RETAIL and Ingress Industrial go up and down completely randomly.

Pair Corralation between CENTRAL RETAIL and Ingress Industrial

Assuming the 90 days trading horizon CENTRAL RETAIL P is expected to under-perform the Ingress Industrial. But the stock apears to be less risky and, when comparing its historical volatility, CENTRAL RETAIL P is 1.4 times less risky than Ingress Industrial. The stock trades about -0.13 of its potential returns per unit of risk. The Ingress Industrial Public is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Ingress Industrial Public on September 28, 2024 and sell it today you would lose (4.00) from holding Ingress Industrial Public or give up 10.26% of portfolio value over 90 days.

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

CENTRAL RETAIL P  vs.  Ingress Industrial Public

CENTRAL RETAIL P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CENTRAL RETAIL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ingress Industrial Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingress Industrial Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CENTRAL RETAIL and Ingress Industrial

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

The idea behind CENTRAL RETAIL P and Ingress Industrial Public 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.