Correlation Between Infraset Public and SiS Distribution

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

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

Diversification Opportunities for Infraset Public and SiS Distribution

0.25

Correlation Coefficient

Infraset Public  SiS Distribution

Modest diversification

The 3 months correlation between Infraset and SiS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Infraset Public and SiS Distribution Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiS Distribution 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 SiS Distribution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiS Distribution Public has no effect on the direction of Infraset Public i.e., Infraset Public and SiS Distribution go up and down completely randomly.

Pair Corralation between Infraset Public and SiS Distribution

Assuming the 90 days trading horizon Infraset Public is expected to generate 1.4 times more return on investment than SiS Distribution. However, Infraset Public is 1.4 times more volatile than SiS Distribution Public. It trades about 0.12 of its potential returns per unit of risk. SiS Distribution Public is currently generating about 0.04 per unit of risk. If you would invest  236.00  in Infraset Public on September 24, 2024 and sell it today you would earn a total of  78.00  from holding Infraset Public or generate 33.05% return on investment over 90 days.

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

Infraset Public  vs.  SiS Distribution Public

Infraset Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infraset Public are ranked lower than 9 (%) 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.

SiS Distribution Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SiS Distribution Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, SiS Distribution may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Infraset Public and SiS Distribution

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

The idea behind Infraset Public and SiS Distribution 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.