Correlation Between Infinitt Healthcare and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Infinitt Healthcare and Lion Chemtech 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 Infinitt Healthcare and Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinitt Healthcare Co and Lion Chemtech Co, you can compare the effects of market volatilities on Infinitt Healthcare and Lion Chemtech 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 Infinitt Healthcare with a short position of Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinitt Healthcare and Lion Chemtech.
Diversification Opportunities for Infinitt Healthcare and Lion Chemtech
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Infinitt and Lion is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare Co and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech and Infinitt Healthcare 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 Infinitt Healthcare Co are associated (or correlated) with Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Infinitt Healthcare i.e., Infinitt Healthcare and Lion Chemtech go up and down completely randomly.
Pair Corralation between Infinitt Healthcare and Lion Chemtech
Assuming the 90 days trading horizon Infinitt Healthcare Co is expected to under-perform the Lion Chemtech. But the stock apears to be less risky and, when comparing its historical volatility, Infinitt Healthcare Co is 1.63 times less risky than Lion Chemtech. The stock trades about -0.08 of its potential returns per unit of risk. The Lion Chemtech Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 273,660 in Lion Chemtech Co on October 13, 2024 and sell it today you would lose (33,660) from holding Lion Chemtech Co or give up 12.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinitt Healthcare Co vs. Lion Chemtech Co
Performance |
| Timeline |
| Infinitt Healthcare |
| Lion Chemtech |
Infinitt Healthcare and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinitt Healthcare and Lion Chemtech
The main advantage of trading using opposite Infinitt Healthcare and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinitt Healthcare position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Infinitt Healthcare vs. Koryo Credit Information | Infinitt Healthcare vs. SCI Information Service | Infinitt Healthcare vs. Haitai Confectionery Foods | Infinitt Healthcare vs. LG Chemicals |
| Lion Chemtech vs. Digital Multimedia Technology | Lion Chemtech vs. Infinitt Healthcare Co | Lion Chemtech vs. YG Entertainment | Lion Chemtech vs. Cube Entertainment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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