Correlation Between INFINITT Healthcare and SeAH Bestee
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and SeAH Bestee 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 SeAH Bestee 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 SeAH Bestee, you can compare the effects of market volatilities on INFINITT Healthcare and SeAH Bestee 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 SeAH Bestee. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and SeAH Bestee.
Diversification Opportunities for INFINITT Healthcare and SeAH Bestee
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INFINITT and SeAH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and SeAH Bestee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Bestee 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 SeAH Bestee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Bestee has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and SeAH Bestee go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and SeAH Bestee
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to under-perform the SeAH Bestee. But the stock apears to be less risky and, when comparing its historical volatility, INFINITT Healthcare Co is 1.57 times less risky than SeAH Bestee. The stock trades about -0.02 of its potential returns per unit of risk. The SeAH Bestee is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,916,000 in SeAH Bestee on October 26, 2024 and sell it today you would earn a total of 78,000 from holding SeAH Bestee or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. SeAH Bestee
Performance |
| Timeline |
| INFINITT Healthcare |
| SeAH Bestee |
INFINITT Healthcare and SeAH Bestee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and SeAH Bestee
The main advantage of trading using opposite INFINITT Healthcare and SeAH Bestee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, SeAH Bestee 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 SeAH Bestee will offset losses from the drop in SeAH Bestee's long position.The idea behind INFINITT Healthcare Co and SeAH Bestee 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 the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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