Correlation Between Infimer and Eldav L

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

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

Diversification Opportunities for Infimer and Eldav L

0.01

Correlation Coefficient

Infimer  Eldav L

Significant diversification

The 3 months correlation between Infimer and Eldav is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Infimer and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L and Infimer 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 Infimer are associated (or correlated) with Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of Infimer i.e., Infimer and Eldav L go up and down completely randomly.

Pair Corralation between Infimer and Eldav L

Assuming the 90 days trading horizon Infimer is expected to generate 111.42 times more return on investment than Eldav L. However, Infimer is 111.42 times more volatile than Eldav L. It trades about 0.33 of its potential returns per unit of risk. Eldav L is currently generating about 0.09 per unit of risk. If you would invest  2,500,000  in Infimer on September 27, 2024 and sell it today you would lose (1,520,000) from holding Infimer or give up 60.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.83%
Values	Daily Returns

Infimer  vs.  Eldav L

Infimer

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Infimer are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Infimer sustained solid returns over the last few months and may actually be approaching a breakup point.

Eldav L

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eldav L are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eldav L unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infimer and Eldav L

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

The idea behind Infimer and Eldav L 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.