Correlation Between Infobird and Alight
Can any of the company-specific risk be diversified away by investing in both Infobird and Alight 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 Infobird and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infobird Co and Alight Inc, you can compare the effects of market volatilities on Infobird and Alight 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 Infobird with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infobird and Alight.
Diversification Opportunities for Infobird and Alight
Average diversification
The 3 months correlation between Infobird and Alight is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Infobird Co and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Infobird 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 Infobird Co are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Infobird i.e., Infobird and Alight go up and down completely randomly.
Pair Corralation between Infobird and Alight
Given the investment horizon of 90 days Infobird Co is expected to under-perform the Alight. In addition to that, Infobird is 5.52 times more volatile than Alight Inc. It trades about 0.0 of its total potential returns per unit of risk. Alight Inc is currently generating about 0.02 per unit of volatility. If you would invest 765.00 in Alight Inc on August 26, 2024 and sell it today you would earn a total of 33.00 from holding Alight Inc or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infobird Co vs. Alight Inc
Performance |
| Timeline |
| Infobird |
| Alight Inc |
Infobird and Alight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infobird and Alight
The main advantage of trading using opposite Infobird and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infobird position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.The idea behind Infobird Co and Alight Inc 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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