Correlation Between Ingles Markets and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both Ingles Markets and Dingdong ADR 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 Ingles Markets and Dingdong ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingles Markets Incorporated and Dingdong ADR, you can compare the effects of market volatilities on Ingles Markets and Dingdong ADR 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 Ingles Markets with a short position of Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and Dingdong ADR.
Diversification Opportunities for Ingles Markets and Dingdong ADR
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ingles and Dingdong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR and Ingles Markets 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 Ingles Markets Incorporated are associated (or correlated) with Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of Ingles Markets i.e., Ingles Markets and Dingdong ADR go up and down completely randomly.
Pair Corralation between Ingles Markets and Dingdong ADR
Assuming the 90 days horizon Ingles Markets Incorporated is expected to under-perform the Dingdong ADR. But the stock apears to be less risky and, when comparing its historical volatility, Ingles Markets Incorporated is 3.66 times less risky than Dingdong ADR. The stock trades about -0.03 of its potential returns per unit of risk. The Dingdong ADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 471.00 in Dingdong ADR on September 7, 2024 and sell it today you would lose (64.00) from holding Dingdong ADR or give up 13.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ingles Markets Incorporated vs. Dingdong ADR
Performance |
Timeline |
Ingles Markets |
Dingdong ADR |
Ingles Markets and Dingdong ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingles Markets and Dingdong ADR
The main advantage of trading using opposite Ingles Markets and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingles Markets position performs unexpectedly, Dingdong ADR 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 Dingdong ADR will offset losses from the drop in Dingdong ADR's long position.Ingles Markets vs. Weis Markets | Ingles Markets vs. Natural Grocers by | Ingles Markets vs. Sendas Distribuidora SA | Ingles Markets vs. Grocery Outlet Holding |
Dingdong ADR vs. Ingles Markets Incorporated | Dingdong ADR vs. Natural Grocers by | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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