Correlation Between Infracommerce CXaaS and Light SA

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

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

Diversification Opportunities for Infracommerce CXaaS and Light SA

0.86

Correlation Coefficient

Infracommerce CXaaS  Light SA

Very poor diversification

The 3 months correlation between Infracommerce and Light is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Infracommerce CXaaS SA and Light SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light SA and Infracommerce CXaaS 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 Infracommerce CXaaS SA are associated (or correlated) with Light SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light SA has no effect on the direction of Infracommerce CXaaS i.e., Infracommerce CXaaS and Light SA go up and down completely randomly.

Pair Corralation between Infracommerce CXaaS and Light SA

Assuming the 90 days trading horizon Infracommerce CXaaS SA is expected to generate 1.66 times more return on investment than Light SA. However, Infracommerce CXaaS is 1.66 times more volatile than Light SA. It trades about -0.08 of its potential returns per unit of risk. Light SA is currently generating about -0.21 per unit of risk. If you would invest  17.00  in Infracommerce CXaaS SA on September 15, 2024 and sell it today you would lose (7.00) from holding Infracommerce CXaaS SA or give up 41.18% of portfolio value over 90 days.

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

Infracommerce CXaaS SA  vs.  Light SA

Infracommerce CXaaS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infracommerce CXaaS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Light SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Light SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Infracommerce CXaaS and Light SA

The main advantage of trading using opposite Infracommerce CXaaS and Light SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infracommerce CXaaS position performs unexpectedly, Light SA 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 Light SA will offset losses from the drop in Light SA's long position.

The idea behind Infracommerce CXaaS SA and Light SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.