Correlation Between InfuSystems Holdings and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both InfuSystems Holdings and Bowhead Specialty 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 InfuSystems Holdings and Bowhead Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfuSystems Holdings and Bowhead Specialty Holdings, you can compare the effects of market volatilities on InfuSystems Holdings and Bowhead Specialty 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 InfuSystems Holdings with a short position of Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfuSystems Holdings and Bowhead Specialty.
Diversification Opportunities for InfuSystems Holdings and Bowhead Specialty
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between InfuSystems and Bowhead is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and InfuSystems Holdings 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 InfuSystems Holdings are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and Bowhead Specialty go up and down completely randomly.
Pair Corralation between InfuSystems Holdings and Bowhead Specialty
Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the Bowhead Specialty. In addition to that, InfuSystems Holdings is 1.73 times more volatile than Bowhead Specialty Holdings. It trades about -0.25 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about -0.33 per unit of volatility. If you would invest 3,604 in Bowhead Specialty Holdings on October 13, 2024 and sell it today you would lose (420.00) from holding Bowhead Specialty Holdings or give up 11.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
InfuSystems Holdings vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| InfuSystems Holdings |
| Bowhead Specialty |
InfuSystems Holdings and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfuSystems Holdings and Bowhead Specialty
The main advantage of trading using opposite InfuSystems Holdings and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| InfuSystems Holdings vs. Electromed | InfuSystems Holdings vs. Issuer Direct Corp | InfuSystems Holdings vs. IRIDEX | InfuSystems Holdings vs. Milestone Scientific |
| Bowhead Specialty vs. The Coca Cola | Bowhead Specialty vs. ARIA Wireless Systems | Bowhead Specialty vs. Merit Medical Systems | Bowhead Specialty vs. InfuSystems Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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