Correlation Between Ingersoll Rand and American Financial
Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand and American Financial 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 Ingersoll Rand and American Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and American Financial Group, you can compare the effects of market volatilities on Ingersoll Rand and American Financial 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 Ingersoll Rand with a short position of American Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and American Financial.
Diversification Opportunities for Ingersoll Rand and American Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ingersoll and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and American Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Financial and Ingersoll Rand 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 Ingersoll Rand are associated (or correlated) with American Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Financial has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and American Financial go up and down completely randomly.
Pair Corralation between Ingersoll Rand and American Financial
If you would invest 10,692 in American Financial Group on January 19, 2024 and sell it today you would earn a total of 1,849 from holding American Financial Group or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ingersoll Rand vs. American Financial Group
Performance |
| Timeline |
| Ingersoll Rand |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Financial |
Ingersoll Rand and American Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingersoll Rand and American Financial
The main advantage of trading using opposite Ingersoll Rand and American Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand position performs unexpectedly, American Financial 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 American Financial will offset losses from the drop in American Financial's long position.| Ingersoll Rand vs. Uranium Energy Corp | Ingersoll Rand vs. Encore Wire | Ingersoll Rand vs. US Silica Holdings | Ingersoll Rand vs. Summit Materials |
| American Financial vs. Selective Insurance Group | American Financial vs. Horace Mann Educators | American Financial vs. Kemper | American Financial vs. ProAssurance |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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