Correlation Between Veeco Instruments and Infinera
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments and Infinera 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 Veeco Instruments and Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and Infinera, you can compare the effects of market volatilities on Veeco Instruments and Infinera 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 Veeco Instruments with a short position of Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and Infinera.
Diversification Opportunities for Veeco Instruments and Infinera
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Veeco and Infinera is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera and Veeco Instruments 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 Veeco Instruments are associated (or correlated) with Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and Infinera go up and down completely randomly.
Pair Corralation between Veeco Instruments and Infinera
Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Infinera. In addition to that, Veeco Instruments is 3.23 times more volatile than Infinera. It trades about -0.2 of its total potential returns per unit of risk. Infinera is currently generating about -0.1 per unit of volatility. If you would invest 669.00 in Infinera on August 24, 2024 and sell it today you would lose (8.00) from holding Infinera or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Veeco Instruments vs. Infinera
Performance |
| Timeline |
| Veeco Instruments |
| Infinera |
Veeco Instruments and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and Infinera
The main advantage of trading using opposite Veeco Instruments and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| Veeco Instruments vs. Ultra Clean Holdings | Veeco Instruments vs. Cohu Inc | Veeco Instruments vs. Ichor Holdings | Veeco Instruments vs. Entegris |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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