Correlation Between Inficon Holding and Belimo Holding

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

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

Diversification Opportunities for Inficon Holding and Belimo Holding

0.43

Correlation Coefficient

Inficon Holding  Belimo Holding

Very weak diversification

The 3 months correlation between Inficon and Belimo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Inficon Holding and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and Inficon Holding 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 Inficon Holding are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Inficon Holding i.e., Inficon Holding and Belimo Holding go up and down completely randomly.

Pair Corralation between Inficon Holding and Belimo Holding

Assuming the 90 days trading horizon Inficon Holding is expected to under-perform the Belimo Holding. In addition to that, Inficon Holding is 1.49 times more volatile than Belimo Holding. It trades about -0.14 of its total potential returns per unit of risk. Belimo Holding is currently generating about 0.04 per unit of volatility. If you would invest  58,500  in Belimo Holding on September 19, 2024 and sell it today you would earn a total of  1,150  from holding Belimo Holding or generate 1.97% return on investment over 90 days.

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

Inficon Holding  vs.  Belimo Holding

Inficon Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inficon Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Belimo Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belimo Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Belimo Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Inficon Holding and Belimo Holding

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

The idea behind Inficon Holding and Belimo Holding 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.