Correlation Between Ingersoll Rand and Tredegar

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

By analyzing existing cross correlation between Ingersoll Rand and Tredegar, you can compare the effects of market volatilities on Ingersoll Rand and Tredegar 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 Tredegar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Tredegar.

Diversification Opportunities for Ingersoll Rand and Tredegar

0.84

Correlation Coefficient

Ingersoll Rand  Tredegar

Very poor diversification

The 3 months correlation between Ingersoll and Tredegar is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Tredegar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tredegar 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 Tredegar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tredegar has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and Tredegar go up and down completely randomly.

Pair Corralation between Ingersoll Rand and Tredegar

Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 8.61 times less return on investment than Tredegar. In addition to that, Ingersoll Rand is 1.28 times more volatile than Tredegar. It trades about 0.0 of its total potential returns per unit of risk. Tredegar is currently generating about 0.02 per unit of volatility. If you would invest  833.00  in Tredegar on May 6, 2025 and sell it today you would earn a total of  7.00  from holding Tredegar or generate 0.84% return on investment over 90 days.

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

Ingersoll Rand  vs.  Tredegar

Ingersoll Rand

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ingersoll Rand has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ingersoll Rand is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Tredegar

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tredegar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Tredegar is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ingersoll Rand and Tredegar

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

The idea behind Ingersoll Rand and Tredegar 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.