Correlation Between KPX Green and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both KPX Green and INFINITT Healthcare 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 KPX Green and INFINITT Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and INFINITT Healthcare Co, you can compare the effects of market volatilities on KPX Green and INFINITT Healthcare 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 KPX Green with a short position of INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and INFINITT Healthcare.
Diversification Opportunities for KPX Green and INFINITT Healthcare
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KPX and INFINITT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare and KPX Green 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 KPX Green Chemical are associated (or correlated) with INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of KPX Green i.e., KPX Green and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between KPX Green and INFINITT Healthcare
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 5.83 times more return on investment than INFINITT Healthcare. However, KPX Green is 5.83 times more volatile than INFINITT Healthcare Co. It trades about 0.39 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about -0.18 per unit of risk. If you would invest 463,292 in KPX Green Chemical on October 12, 2024 and sell it today you would earn a total of 219,708 from holding KPX Green Chemical or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. INFINITT Healthcare Co
Performance |
| Timeline |
| KPX Green Chemical |
| INFINITT Healthcare |
KPX Green and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and INFINITT Healthcare
The main advantage of trading using opposite KPX Green and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| KPX Green vs. Pureun Mutual Savings | KPX Green vs. Golden Bridge Investment | KPX Green vs. KTB Investment Securities | KPX Green vs. Taegu Broadcasting |
| INFINITT Healthcare vs. InfoBank | INFINITT Healthcare vs. BNK Financial Group | INFINITT Healthcare vs. SK Chemicals Co | INFINITT Healthcare vs. KPX Green Chemical |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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