Correlation Between AbbVie and Ingen Technologies
Can any of the company-specific risk be diversified away by investing in both AbbVie and Ingen Technologies 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 AbbVie and Ingen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbbVie Inc and Ingen Technologies, you can compare the effects of market volatilities on AbbVie and Ingen Technologies 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 AbbVie with a short position of Ingen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbbVie and Ingen Technologies.
Diversification Opportunities for AbbVie and Ingen Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AbbVie and Ingen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AbbVie Inc and Ingen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingen Technologies and AbbVie 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 AbbVie Inc are associated (or correlated) with Ingen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingen Technologies has no effect on the direction of AbbVie i.e., AbbVie and Ingen Technologies go up and down completely randomly.
Pair Corralation between AbbVie and Ingen Technologies
If you would invest 14,203 in AbbVie Inc on January 19, 2024 and sell it today you would earn a total of 2,263 from holding AbbVie Inc or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
AbbVie Inc vs. Ingen Technologies
Performance |
| Timeline |
| AbbVie Inc |
| Ingen Technologies |
AbbVie and Ingen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AbbVie and Ingen Technologies
The main advantage of trading using opposite AbbVie and Ingen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbbVie position performs unexpectedly, Ingen Technologies 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 Ingen Technologies will offset losses from the drop in Ingen Technologies' long position.The idea behind AbbVie Inc and Ingen Technologies 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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