Correlation Between INFINITT Healthcare and InnoTherapy

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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

INFINITTInnoTherapyDiversified AwayINFINITTInnoTherapyDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

INFINITT Healthcare Co  vs.  InnoTherapy

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.15071200 246960
       Timeline  
INFINITT Healthcare 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days INFINITT Healthcare Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INFINITT Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3,9004,0004,1004,2004,3004,4004,5004,6004,700
InnoTherapy 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in InnoTherapy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, InnoTherapy sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8,0008,5009,0009,50010,00010,500

INFINITT Healthcare and InnoTherapy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.14-2.35-1.56-0.780.00.781.572.353.14 0.060.070.080.090.10
JavaScript chart by amCharts 3.21.15071200 246960
       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.
The idea behind INFINITT Healthcare Co and InnoTherapy 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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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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