Correlation Between Infimer and OPC Energy

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

By analyzing existing cross correlation between Infimer and OPC Energy, you can compare the effects of market volatilities on Infimer and OPC Energy 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 OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infimer and OPC Energy.

Diversification Opportunities for Infimer and OPC Energy

0.62

Correlation Coefficient

Infimer  OPC Energy

Poor diversification

The 3 months correlation between Infimer and OPC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Infimer and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Infimer i.e., Infimer and OPC Energy go up and down completely randomly.

Pair Corralation between Infimer and OPC Energy

Assuming the 90 days trading horizon Infimer is expected to generate 53.26 times more return on investment than OPC Energy. However, Infimer is 53.26 times more volatile than OPC Energy. It trades about 0.13 of its potential returns per unit of risk. OPC Energy is currently generating about -0.01 per unit of risk. If you would invest  36,900  in Infimer on September 16, 2024 and sell it today you would earn a total of  2,052,100  from holding Infimer or generate 5561.25% return on investment over 90 days.

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

Infimer  vs.  OPC Energy

Infimer

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Infimer are ranked lower than 28 (%) 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.

OPC Energy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OPC Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, OPC Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Infimer and OPC Energy

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

The idea behind Infimer and OPC Energy 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.