Correlation Between Retractable Technologies and InfuSystems Holdings
Can any of the company-specific risk be diversified away by investing in both Retractable Technologies and InfuSystems Holdings 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 Retractable Technologies and InfuSystems Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retractable Technologies and InfuSystems Holdings, you can compare the effects of market volatilities on Retractable Technologies and InfuSystems Holdings 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 Retractable Technologies with a short position of InfuSystems Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retractable Technologies and InfuSystems Holdings.
Diversification Opportunities for Retractable Technologies and InfuSystems Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Retractable and InfuSystems is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Retractable Technologies and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and Retractable 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 Retractable Technologies are associated (or correlated) with InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of Retractable Technologies i.e., Retractable Technologies and InfuSystems Holdings go up and down completely randomly.
Pair Corralation between Retractable Technologies and InfuSystems Holdings
Considering the 90-day investment horizon Retractable Technologies is expected to under-perform the InfuSystems Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Retractable Technologies is 1.25 times less risky than InfuSystems Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The InfuSystems Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 998.00 in InfuSystems Holdings on August 24, 2024 and sell it today you would lose (74.00) from holding InfuSystems Holdings or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retractable Technologies vs. InfuSystems Holdings
Performance |
| Timeline |
| Retractable Technologies |
| InfuSystems Holdings |
Retractable Technologies and InfuSystems Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retractable Technologies and InfuSystems Holdings
The main advantage of trading using opposite Retractable Technologies and InfuSystems Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retractable Technologies position performs unexpectedly, InfuSystems Holdings 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 InfuSystems Holdings will offset losses from the drop in InfuSystems Holdings' long position.| Retractable Technologies vs. Milestone Scientific | Retractable Technologies vs. CarPartsCom | Retractable Technologies vs. OncoCyte Corp | Retractable Technologies vs. Alpha Pro Tech |
| InfuSystems Holdings vs. Electromed | InfuSystems Holdings vs. Issuer Direct Corp | InfuSystems Holdings vs. IRIDEX | InfuSystems Holdings vs. Milestone Scientific |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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