Correlation Between INFINITT Healthcare and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and Keyang Electric 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 Keyang Electric 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 Keyang Electric Machinery, you can compare the effects of market volatilities on INFINITT Healthcare and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and Keyang Electric.
Diversification Opportunities for INFINITT Healthcare and Keyang Electric
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INFINITT and Keyang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and Keyang Electric go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and Keyang Electric
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to under-perform the Keyang Electric. But the stock apears to be less risky and, when comparing its historical volatility, INFINITT Healthcare Co is 2.92 times less risky than Keyang Electric. The stock trades about -0.23 of its potential returns per unit of risk. The Keyang Electric Machinery is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 350,000 in Keyang Electric Machinery on October 17, 2024 and sell it today you would earn a total of 59,000 from holding Keyang Electric Machinery or generate 16.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. Keyang Electric Machinery
Performance |
| Timeline |
| INFINITT Healthcare |
| Keyang Electric Machinery |
INFINITT Healthcare and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and Keyang Electric
The main advantage of trading using opposite INFINITT Healthcare and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| INFINITT Healthcare vs. Myoung Shin Industrial | INFINITT Healthcare vs. Korean Drug Co | INFINITT Healthcare vs. Eagon Industrial Co | INFINITT Healthcare vs. Lee Ku Industrial |
| Keyang Electric vs. Insun Environment New | Keyang Electric vs. Han Kook Steel | Keyang Electric vs. INSUN Environmental New | Keyang Electric vs. Moonbae Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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