Correlation Between Ingress Industrial and NSL Foods

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

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

Diversification Opportunities for Ingress Industrial and NSL Foods

0.71

Correlation Coefficient

Ingress Industrial  NSL Foods

Poor diversification

The 3 months correlation between Ingress and NSL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ingress Industrial Public and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods Public and Ingress Industrial 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 Ingress Industrial Public are associated (or correlated) with NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of Ingress Industrial i.e., Ingress Industrial and NSL Foods go up and down completely randomly.

Pair Corralation between Ingress Industrial and NSL Foods

Assuming the 90 days trading horizon Ingress Industrial Public is expected to generate 26.58 times more return on investment than NSL Foods. However, Ingress Industrial is 26.58 times more volatile than NSL Foods Public. It trades about 0.06 of its potential returns per unit of risk. NSL Foods Public is currently generating about 0.1 per unit of risk. If you would invest  49.00  in Ingress Industrial Public on September 14, 2024 and sell it today you would lose (13.00) from holding Ingress Industrial Public or give up 26.53% of portfolio value over 90 days.

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

Ingress Industrial Public  vs.  NSL Foods Public

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 conflicting 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.

NSL Foods Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSL Foods Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Ingress Industrial and NSL Foods

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

The idea behind Ingress Industrial Public and NSL Foods 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.