Correlation Between XORTX Therapeutics and Ingles Markets

Can any of the company-specific risk be diversified away by investing in both XORTX Therapeutics and Ingles Markets 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 XORTX Therapeutics and Ingles Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XORTX Therapeutics and Ingles Markets Incorporated, you can compare the effects of market volatilities on XORTX Therapeutics and Ingles Markets 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 XORTX Therapeutics with a short position of Ingles Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of XORTX Therapeutics and Ingles Markets.

Diversification Opportunities for XORTX Therapeutics and Ingles Markets

-0.43

Correlation Coefficient

XORTX Therapeutics  Ingles Markets

Very good diversification

The 3 months correlation between XORTX and Ingles is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding XORTX Therapeutics and Ingles Markets Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingles Markets and XORTX Therapeutics 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 XORTX Therapeutics are associated (or correlated) with Ingles Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingles Markets has no effect on the direction of XORTX Therapeutics i.e., XORTX Therapeutics and Ingles Markets go up and down completely randomly.

Pair Corralation between XORTX Therapeutics and Ingles Markets

Given the investment horizon of 90 days XORTX Therapeutics is expected to under-perform the Ingles Markets. In addition to that, XORTX Therapeutics is 2.41 times more volatile than Ingles Markets Incorporated. It trades about -0.14 of its total potential returns per unit of risk. Ingles Markets Incorporated is currently generating about -0.28 per unit of volatility. If you would invest  7,218  in Ingles Markets Incorporated on September 23, 2024 and sell it today you would lose (584.00) from holding Ingles Markets Incorporated or give up 8.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

XORTX Therapeutics  vs.  Ingles Markets Incorporated

XORTX Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XORTX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ingles Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingles Markets Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators 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 XORTX Therapeutics and Ingles Markets

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

The idea behind XORTX Therapeutics and Ingles Markets Incorporated 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.