Correlation Between Eshallgo and Infinera

Can any of the company-specific risk be diversified away by investing in both Eshallgo 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 Eshallgo and Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eshallgo Class A and Infinera, you can compare the effects of market volatilities on Eshallgo 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 Eshallgo with a short position of Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Infinera.

Diversification Opportunities for Eshallgo and Infinera

-0.78

Correlation Coefficient

Eshallgo  Infinera

Pay attention - limited upside

The 3 months correlation between Eshallgo and Infinera is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera and Eshallgo 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 Eshallgo Class A 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 Eshallgo i.e., Eshallgo and Infinera go up and down completely randomly.

Pair Corralation between Eshallgo and Infinera

Given the investment horizon of 90 days Eshallgo Class A is expected to generate 13.51 times more return on investment than Infinera. However, Eshallgo is 13.51 times more volatile than Infinera. It trades about 0.15 of its potential returns per unit of risk. Infinera is currently generating about -0.08 per unit of risk. If you would invest  193.00  in Eshallgo Class A on September 25, 2024 and sell it today you would earn a total of  153.50  from holding Eshallgo Class A or generate 79.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Eshallgo Class A  vs.  Infinera

Eshallgo Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Infinera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinera has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Infinera is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Eshallgo and Infinera

The main advantage of trading using opposite Eshallgo and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo 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.

The idea behind Eshallgo Class A and Infinera 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.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.