Correlation Between InfraCap Equity and Hoya Capital
Can any of the company-specific risk be diversified away by investing in both InfraCap Equity and Hoya Capital 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 InfraCap Equity and Hoya Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfraCap Equity Income and Hoya Capital High, you can compare the effects of market volatilities on InfraCap Equity and Hoya Capital 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 InfraCap Equity with a short position of Hoya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfraCap Equity and Hoya Capital.
Diversification Opportunities for InfraCap Equity and Hoya Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InfraCap and Hoya is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding InfraCap Equity Income and Hoya Capital High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Capital High and InfraCap Equity 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 InfraCap Equity Income are associated (or correlated) with Hoya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Capital High has no effect on the direction of InfraCap Equity i.e., InfraCap Equity and Hoya Capital go up and down completely randomly.
Pair Corralation between InfraCap Equity and Hoya Capital
Given the investment horizon of 90 days InfraCap Equity Income is expected to generate 0.82 times more return on investment than Hoya Capital. However, InfraCap Equity Income is 1.21 times less risky than Hoya Capital. It trades about 0.06 of its potential returns per unit of risk. Hoya Capital High is currently generating about 0.04 per unit of risk. If you would invest 2,043 in InfraCap Equity Income on November 28, 2024 and sell it today you would earn a total of 607.00 from holding InfraCap Equity Income or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfraCap Equity Income vs. Hoya Capital High
Performance |
| Timeline |
| InfraCap Equity Income |
| Hoya Capital High |
InfraCap Equity and Hoya Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfraCap Equity and Hoya Capital
The main advantage of trading using opposite InfraCap Equity and Hoya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfraCap Equity position performs unexpectedly, Hoya Capital 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 Hoya Capital will offset losses from the drop in Hoya Capital's long position.| InfraCap Equity vs. Hoya Capital High | InfraCap Equity vs. Virtus InfraCap Preferred | InfraCap Equity vs. InfraCap MLP ETF | InfraCap Equity vs. Qurate Retail |
| Hoya Capital vs. InfraCap Equity Income | Hoya Capital vs. Virtus InfraCap Preferred | Hoya Capital vs. The Hoya Capital | Hoya Capital vs. Qurate Retail |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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