Correlation Between Infineon Technologies and Power Integrations
Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Power Integrations 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 Power Integrations 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 Power Integrations, you can compare the effects of market volatilities on Infineon Technologies and Power Integrations 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 Power Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Power Integrations.
Diversification Opportunities for Infineon Technologies and Power Integrations
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Infineon and Power is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations 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 Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Power Integrations go up and down completely randomly.
Pair Corralation between Infineon Technologies and Power Integrations
Assuming the 90 days horizon Infineon Technologies AG is expected to generate 0.96 times more return on investment than Power Integrations. However, Infineon Technologies AG is 1.04 times less risky than Power Integrations. It trades about 0.07 of its potential returns per unit of risk. Power Integrations is currently generating about 0.0 per unit of risk. If you would invest 3,327 in Infineon Technologies AG on August 25, 2024 and sell it today you would earn a total of 755.00 from holding Infineon Technologies AG or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
Infineon Technologies AG vs. Power Integrations
Performance |
| Timeline |
| Infineon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Power Integrations |
Infineon Technologies and Power Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infineon Technologies and Power Integrations
The main advantage of trading using opposite Infineon Technologies and Power Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies position performs unexpectedly, Power Integrations 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 Power Integrations will offset losses from the drop in Power Integrations' long position.| Infineon Technologies vs. Renesas Electronics | Infineon Technologies vs. Power Integrations | Infineon Technologies vs. Rohm Co Ltd | Infineon Technologies vs. MACOM Technology Solutions |
| Power Integrations vs. Diodes Incorporated | Power Integrations vs. MACOM Technology Solutions | Power Integrations vs. Cirrus Logic | Power Integrations vs. Amkor Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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