Correlation Between Analog Devices and Ingram Micro

Can any of the company-specific risk be diversified away by investing in both Analog Devices and Ingram Micro 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 Analog Devices and Ingram Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analog Devices and Ingram Micro Holding, you can compare the effects of market volatilities on Analog Devices and Ingram Micro 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 Analog Devices with a short position of Ingram Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Ingram Micro.

Diversification Opportunities for Analog Devices and Ingram Micro

0.85

Correlation Coefficient

Analog Devices  Ingram Micro

Very poor diversification

The 3 months correlation between Analog and Ingram is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Ingram Micro Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingram Micro Holding and Analog Devices 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 Analog Devices are associated (or correlated) with Ingram Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingram Micro Holding has no effect on the direction of Analog Devices i.e., Analog Devices and Ingram Micro go up and down completely randomly.

Pair Corralation between Analog Devices and Ingram Micro

Considering the 90-day investment horizon Analog Devices is expected to generate 0.8 times more return on investment than Ingram Micro. However, Analog Devices is 1.25 times less risky than Ingram Micro. It trades about 0.18 of its potential returns per unit of risk. Ingram Micro Holding is currently generating about 0.12 per unit of risk. If you would invest  19,286  in Analog Devices on May 1, 2025 and sell it today you would earn a total of  3,789  from holding Analog Devices or generate 19.65% return on investment over 90 days.

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

Analog Devices  vs.  Ingram Micro Holding

Analog Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ingram Micro Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ingram Micro Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Ingram Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and Ingram Micro

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

The idea behind Analog Devices and Ingram Micro Holding 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..