Correlation Between Infinitt Healthcare and Kukil Metal

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

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

Diversification Opportunities for Infinitt Healthcare and Kukil Metal

-0.29

Correlation Coefficient

Infinitt Healthcare  Kukil Metal

Very good diversification

The 3 months correlation between Infinitt and Kukil is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Infinitt Healthcare 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 Infinitt Healthcare Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Infinitt Healthcare i.e., Infinitt Healthcare and Kukil Metal go up and down completely randomly.

Pair Corralation between Infinitt Healthcare and Kukil Metal

Assuming the 90 days trading horizon Infinitt Healthcare Co is expected to generate 4.31 times more return on investment than Kukil Metal. However, Infinitt Healthcare is 4.31 times more volatile than Kukil Metal Co. It trades about 0.08 of its potential returns per unit of risk. Kukil Metal Co is currently generating about 0.03 per unit of risk. If you would invest  420,000  in Infinitt Healthcare Co on December 25, 2024 and sell it today you would earn a total of  77,000  from holding Infinitt Healthcare Co or generate 18.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Infinitt Healthcare Co  vs.  Kukil Metal Co

Infinitt Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infinitt Healthcare Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Infinitt Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Kukil Metal

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kukil Metal Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kukil Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Infinitt Healthcare and Kukil Metal

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

The idea behind Infinitt Healthcare Co and Kukil Metal Co 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.