Correlation Between Ampco Pittsburgh and Ingersoll Rand
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh 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 Ampco Pittsburgh and Ingersoll Rand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Ingersoll Rand, you can compare the effects of market volatilities on Ampco Pittsburgh 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 Ampco Pittsburgh with a short position of Ingersoll Rand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Ingersoll Rand.
Diversification Opportunities for Ampco Pittsburgh and Ingersoll Rand
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampco and Ingersoll is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand and Ampco Pittsburgh 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 Ampco Pittsburgh 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 Ampco Pittsburgh i.e., Ampco Pittsburgh and Ingersoll Rand go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and Ingersoll Rand
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Ingersoll Rand. In addition to that, Ampco Pittsburgh is 2.19 times more volatile than Ingersoll Rand. It trades about -0.02 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 4,705 in Ingersoll Rand on January 20, 2024 and sell it today you would earn a total of 4,192 from holding Ingersoll Rand or generate 89.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. Ingersoll Rand
Performance |
| Timeline |
| Ampco Pittsburgh |
| Ingersoll Rand |
Ampco Pittsburgh and Ingersoll Rand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and Ingersoll Rand
The main advantage of trading using opposite Ampco Pittsburgh and Ingersoll Rand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh 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.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. ESAB Corp | Ampco Pittsburgh vs. Gulf Island Fabrication |
| Ingersoll Rand vs. Emerson Electric | Ingersoll Rand vs. Smith AO | Ingersoll Rand vs. Eaton PLC | Ingersoll Rand vs. Cummins |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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