Correlation Between NeuPath Health and Infinico Metals

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

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

Diversification Opportunities for NeuPath Health and Infinico Metals

0.3

Correlation Coefficient

NeuPath Health  Infinico Metals

Weak diversification

The 3 months correlation between NeuPath and Infinico is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NeuPath Health and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp and NeuPath Health 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 NeuPath Health are associated (or correlated) with Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of NeuPath Health i.e., NeuPath Health and Infinico Metals go up and down completely randomly.

Pair Corralation between NeuPath Health and Infinico Metals

Assuming the 90 days trading horizon NeuPath Health is expected to under-perform the Infinico Metals. But the stock apears to be less risky and, when comparing its historical volatility, NeuPath Health is 2.1 times less risky than Infinico Metals. The stock trades about -0.04 of its potential returns per unit of risk. The Infinico Metals Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Infinico Metals Corp on September 3, 2024 and sell it today you would lose (0.50) from holding Infinico Metals Corp or give up 16.67% of portfolio value over 90 days.

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

NeuPath Health  vs.  Infinico Metals Corp

NeuPath Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NeuPath Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals 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 NeuPath Health and Infinico Metals

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

The idea behind NeuPath Health and Infinico Metals Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..