Correlation Between Infinity Pharmaceuticals and Verastem
Can any of the company-specific risk be diversified away by investing in both Infinity Pharmaceuticals and Verastem 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 Infinity Pharmaceuticals and Verastem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinity Pharmaceuticals and Verastem, you can compare the effects of market volatilities on Infinity Pharmaceuticals and Verastem 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 Infinity Pharmaceuticals with a short position of Verastem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Pharmaceuticals and Verastem.
Diversification Opportunities for Infinity Pharmaceuticals and Verastem
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinity and Verastem is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Pharmaceuticals and Verastem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verastem and Infinity Pharmaceuticals 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 Infinity Pharmaceuticals are associated (or correlated) with Verastem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verastem has no effect on the direction of Infinity Pharmaceuticals i.e., Infinity Pharmaceuticals and Verastem go up and down completely randomly.
Pair Corralation between Infinity Pharmaceuticals and Verastem
If you would invest 379.00 in Verastem on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Verastem or generate 45.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Infinity Pharmaceuticals vs. Verastem
Performance |
| Timeline |
| Infinity Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Verastem |
Infinity Pharmaceuticals and Verastem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinity Pharmaceuticals and Verastem
The main advantage of trading using opposite Infinity Pharmaceuticals and Verastem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinity Pharmaceuticals position performs unexpectedly, Verastem 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 Verastem will offset losses from the drop in Verastem's long position.| Infinity Pharmaceuticals vs. NextCure | Infinity Pharmaceuticals vs. Chimerix | Infinity Pharmaceuticals vs. Eledon Pharmaceuticals | Infinity Pharmaceuticals vs. CytomX Therapeutics |
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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