Correlation Between INFINITT Healthcare and DataSolution
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and DataSolution 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 DataSolution 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 DataSolution, you can compare the effects of market volatilities on INFINITT Healthcare and DataSolution 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 DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and DataSolution.
Diversification Opportunities for INFINITT Healthcare and DataSolution
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INFINITT and DataSolution is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution 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 DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and DataSolution go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and DataSolution
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to under-perform the DataSolution. But the stock apears to be less risky and, when comparing its historical volatility, INFINITT Healthcare Co is 2.29 times less risky than DataSolution. The stock trades about -0.05 of its potential returns per unit of risk. The DataSolution is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 510,000 in DataSolution on September 2, 2024 and sell it today you would lose (19,500) from holding DataSolution or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. DataSolution
Performance |
| Timeline |
| INFINITT Healthcare |
| DataSolution |
INFINITT Healthcare and DataSolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and DataSolution
The main advantage of trading using opposite INFINITT Healthcare and DataSolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, DataSolution 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 DataSolution will offset losses from the drop in DataSolution's long position.| INFINITT Healthcare vs. AptaBio Therapeutics | INFINITT Healthcare vs. KT Hitel | INFINITT Healthcare vs. SillaJen | INFINITT Healthcare vs. Cytogen |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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