Correlation Between Omega Flex and Ingersoll Rand

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

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

Diversification Opportunities for Omega Flex and Ingersoll Rand

0.08

Correlation Coefficient

Omega Flex  Ingersoll Rand

Significant diversification

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

Pair Corralation between Omega Flex and Ingersoll Rand

Given the investment horizon of 90 days Omega Flex is expected to under-perform the Ingersoll Rand. In addition to that, Omega Flex is 2.37 times more volatile than Ingersoll Rand. It trades about -0.43 of its total potential returns per unit of risk. Ingersoll Rand is currently generating about -0.09 per unit of volatility. If you would invest  10,243  in Ingersoll Rand on September 16, 2024 and sell it today you would lose (133.00) from holding Ingersoll Rand or give up 1.3% of portfolio value over 90 days.

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

Omega Flex  vs.  Ingersoll Rand

Omega Flex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Flex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ingersoll Rand

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ingersoll Rand are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Ingersoll Rand may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Omega Flex and Ingersoll Rand

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

The idea behind Omega Flex and Ingersoll Rand 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.