Correlation Between Infinitt Healthcare and MetaLabs

Can any of the company-specific risk be diversified away by investing in both Infinitt Healthcare and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on Infinitt Healthcare and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinitt Healthcare and MetaLabs.

Diversification Opportunities for Infinitt Healthcare and MetaLabs

0.61

Correlation Coefficient

Infinitt Healthcare  MetaLabs

Poor diversification

The 3 months correlation between Infinitt and MetaLabs is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Infinitt Healthcare i.e., Infinitt Healthcare and MetaLabs go up and down completely randomly.

Pair Corralation between Infinitt Healthcare and MetaLabs

Assuming the 90 days trading horizon Infinitt Healthcare Co is expected to generate 2.51 times more return on investment than MetaLabs. However, Infinitt Healthcare is 2.51 times more volatile than MetaLabs Co. It trades about 0.09 of its potential returns per unit of risk. MetaLabs Co is currently generating about 0.1 per unit of risk. If you would invest  420,000  in Infinitt Healthcare Co on December 26, 2024 and sell it today you would earn a total of  80,000  from holding Infinitt Healthcare Co or generate 19.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Infinitt Healthcare Co  vs.  MetaLabs Co

Infinitt Healthcare

Risk-Adjusted Performance

Modest

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.

MetaLabs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetaLabs Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MetaLabs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Infinitt Healthcare and MetaLabs

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

The idea behind Infinitt Healthcare Co and MetaLabs 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.