Correlation Between INFINITT Healthcare and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and InnoTherapy 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 InnoTherapy 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 InnoTherapy, you can compare the effects of market volatilities on INFINITT Healthcare and InnoTherapy 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 InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and InnoTherapy.
Diversification Opportunities for INFINITT Healthcare and InnoTherapy
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between INFINITT and InnoTherapy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy 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 InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and InnoTherapy go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and InnoTherapy
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to generate 0.9 times more return on investment than InnoTherapy. However, INFINITT Healthcare Co is 1.11 times less risky than InnoTherapy. It trades about 0.13 of its potential returns per unit of risk. InnoTherapy is currently generating about -0.08 per unit of risk. If you would invest 427,000 in INFINITT Healthcare Co on November 21, 2024 and sell it today you would earn a total of 17,500 from holding INFINITT Healthcare Co or generate 4.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
INFINITT Healthcare Co vs. InnoTherapy
Performance |
Timeline |
INFINITT Healthcare |
InnoTherapy |
INFINITT Healthcare and InnoTherapy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INFINITT Healthcare and InnoTherapy
The main advantage of trading using opposite INFINITT Healthcare and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.INFINITT Healthcare vs. Jeju Bank | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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