Correlation Between Infinico Metals and Acadian Timber
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Acadian Timber 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 Infinico Metals and Acadian Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and Acadian Timber Corp, you can compare the effects of market volatilities on Infinico Metals and Acadian Timber 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 Infinico Metals with a short position of Acadian Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and Acadian Timber.
Diversification Opportunities for Infinico Metals and Acadian Timber
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infinico and Acadian is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Acadian Timber Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Timber Corp and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Acadian Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Timber Corp has no effect on the direction of Infinico Metals i.e., Infinico Metals and Acadian Timber go up and down completely randomly.
Pair Corralation between Infinico Metals and Acadian Timber
Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 9.75 times more return on investment than Acadian Timber. However, Infinico Metals is 9.75 times more volatile than Acadian Timber Corp. It trades about 0.03 of its potential returns per unit of risk. Acadian Timber Corp is currently generating about 0.04 per unit of risk. If you would invest 4.50 in Infinico Metals Corp on August 29, 2024 and sell it today you would lose (2.50) from holding Infinico Metals Corp or give up 55.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.07% |
| Values | Daily Returns |
Infinico Metals Corp vs. Acadian Timber Corp
Performance |
| Timeline |
| Infinico Metals Corp |
| Acadian Timber Corp |
Infinico Metals and Acadian Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and Acadian Timber
The main advantage of trading using opposite Infinico Metals and Acadian Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, Acadian Timber 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 Acadian Timber will offset losses from the drop in Acadian Timber's long position.The idea behind Infinico Metals Corp and Acadian Timber Corp 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.| Acadian Timber vs. Altair Resources | Acadian Timber vs. Diamond Estates Wines | Acadian Timber vs. Partners Value Investments | Acadian Timber vs. Highwood Asset Management |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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