Correlation Between Infineon Technologies and Rohm Co
Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Rohm Co 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 Infineon Technologies and Rohm Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infineon Technologies AG and Rohm Co Ltd, you can compare the effects of market volatilities on Infineon Technologies and Rohm Co 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 Infineon Technologies with a short position of Rohm Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Rohm Co.
Diversification Opportunities for Infineon Technologies and Rohm Co
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infineon and Rohm is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Rohm Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rohm Co and Infineon Technologies 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 Infineon Technologies AG are associated (or correlated) with Rohm Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rohm Co has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Rohm Co go up and down completely randomly.
Pair Corralation between Infineon Technologies and Rohm Co
Assuming the 90 days horizon Infineon Technologies AG is expected to generate 0.98 times more return on investment than Rohm Co. However, Infineon Technologies AG is 1.02 times less risky than Rohm Co. It trades about -0.02 of its potential returns per unit of risk. Rohm Co Ltd is currently generating about -0.31 per unit of risk. If you would invest 3,320 in Infineon Technologies AG on August 29, 2024 and sell it today you would lose (65.00) from holding Infineon Technologies AG or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infineon Technologies AG vs. Rohm Co Ltd
Performance |
| Timeline |
| Infineon Technologies |
| Rohm Co |
Infineon Technologies and Rohm Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infineon Technologies and Rohm Co
The main advantage of trading using opposite Infineon Technologies and Rohm Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies position performs unexpectedly, Rohm Co 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 Rohm Co will offset losses from the drop in Rohm Co's long position.| Infineon Technologies vs. NVIDIA | Infineon Technologies vs. Intel | Infineon Technologies vs. Taiwan Semiconductor Manufacturing | Infineon Technologies vs. Marvell Technology Group |
| Rohm Co vs. NVIDIA | Rohm Co vs. Intel | Rohm Co vs. Taiwan Semiconductor Manufacturing | Rohm Co vs. Marvell Technology Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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