Correlation Between Solux and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both Solux 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 Solux and INFINITT Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solux Co and INFINITT Healthcare Co, you can compare the effects of market volatilities on Solux 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 Solux with a short position of INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solux and INFINITT Healthcare.
Diversification Opportunities for Solux and INFINITT Healthcare
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solux and INFINITT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Solux Co and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare and Solux 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 Solux Co 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 Solux i.e., Solux and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between Solux and INFINITT Healthcare
Assuming the 90 days trading horizon Solux Co is expected to generate 2.49 times more return on investment than INFINITT Healthcare. However, Solux is 2.49 times more volatile than INFINITT Healthcare Co. It trades about -0.01 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about -0.06 per unit of risk. If you would invest 1,000,000 in Solux Co on September 3, 2024 and sell it today you would lose (150,000) from holding Solux Co or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.52% |
| Values | Daily Returns |
Solux Co vs. INFINITT Healthcare Co
Performance |
| Timeline |
| Solux |
| INFINITT Healthcare |
Solux and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solux and INFINITT Healthcare
The main advantage of trading using opposite Solux and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solux 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.| Solux vs. Samsung Electronics Co | Solux vs. Samsung Electronics Co | Solux vs. LG Energy Solution | Solux vs. SK Hynix |
| INFINITT Healthcare vs. AptaBio Therapeutics | INFINITT Healthcare vs. KT Hitel | INFINITT Healthcare vs. SillaJen | INFINITT Healthcare vs. Cytogen |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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