Correlation Between Ingersoll Rand and Amazon

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Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and Amazon Inc, you can compare the effects of market volatilities on Ingersoll Rand and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Amazon.

Diversification Opportunities for Ingersoll Rand and Amazon

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ingersoll and Amazon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Ingersoll Rand i.e., Ingersoll Rand and Amazon go up and down completely randomly.

Pair Corralation between Ingersoll Rand and Amazon

Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 0.63 times more return on investment than Amazon. However, Ingersoll Rand is 1.59 times less risky than Amazon. It trades about 0.21 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.14 per unit of risk. If you would invest  4,409  in Ingersoll Rand on August 29, 2022 and sell it today you would earn a total of  933.00  from holding Ingersoll Rand or generate 21.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Ingersoll Rand  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Ingersoll Rand 
Ingersoll Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ingersoll Rand are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ingersoll Rand may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Ingersoll Price Channel

Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Ingersoll Rand and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ingersoll Rand and Amazon

The main advantage of trading using opposite Ingersoll Rand and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
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The idea behind Ingersoll Rand and Amazon Inc 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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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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