Correlation Between Infraset Public and AIRA Factoring

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

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

Diversification Opportunities for Infraset Public and AIRA Factoring

-0.46

Correlation Coefficient

Infraset Public  AIRA Factoring

Very good diversification

The 3 months correlation between Infraset and AIRA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Infraset Public and AIRA Factoring Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRA Factoring Public and Infraset Public 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 Infraset Public are associated (or correlated) with AIRA Factoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRA Factoring Public has no effect on the direction of Infraset Public i.e., Infraset Public and AIRA Factoring go up and down completely randomly.

Pair Corralation between Infraset Public and AIRA Factoring

Assuming the 90 days trading horizon Infraset Public is expected to under-perform the AIRA Factoring. In addition to that, Infraset Public is 1.05 times more volatile than AIRA Factoring Public. It trades about -0.05 of its total potential returns per unit of risk. AIRA Factoring Public is currently generating about 0.26 per unit of volatility. If you would invest  59.00  in AIRA Factoring Public on September 25, 2024 and sell it today you would earn a total of  10.00  from holding AIRA Factoring Public or generate 16.95% return on investment over 90 days.

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

Infraset Public  vs.  AIRA Factoring Public

Infraset Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infraset Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Infraset Public sustained solid returns over the last few months and may actually be approaching a breakup point.

AIRA Factoring Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIRA Factoring Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Infraset Public and AIRA Factoring

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

The idea behind Infraset Public and AIRA Factoring Public 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.