Correlation Between Ingredion Incorporated and McCormick Company
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated and McCormick Company 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 Ingredion Incorporated and McCormick Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and McCormick Company Incorporated, you can compare the effects of market volatilities on Ingredion Incorporated and McCormick Company 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 Ingredion Incorporated with a short position of McCormick Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and McCormick Company.
Diversification Opportunities for Ingredion Incorporated and McCormick Company
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ingredion and McCormick is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and McCormick Company Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McCormick rporated and Ingredion Incorporated 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 Ingredion Incorporated are associated (or correlated) with McCormick Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McCormick rporated has no effect on the direction of Ingredion Incorporated i.e., Ingredion Incorporated and McCormick Company go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and McCormick Company
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 1.76 times less return on investment than McCormick Company. But when comparing it to its historical volatility, Ingredion Incorporated is 1.75 times less risky than McCormick Company. It trades about 0.1 of its potential returns per unit of risk. McCormick Company Incorporated is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,870 in McCormick Company Incorporated on January 26, 2024 and sell it today you would earn a total of 715.00 from holding McCormick Company Incorporated or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. McCormick Company Incorporated
Performance |
| Timeline |
| Ingredion Incorporated |
| McCormick rporated |
Ingredion Incorporated and McCormick Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and McCormick Company
The main advantage of trading using opposite Ingredion Incorporated and McCormick Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated position performs unexpectedly, McCormick Company 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 McCormick Company will offset losses from the drop in McCormick Company's long position.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| McCormick Company vs. ConAgra Foods | McCormick Company vs. Campbell Soup | McCormick Company vs. Kellanova | McCormick Company vs. General Mills |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |