Correlation Between Infineon Technologies and Mulberry Group

Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Mulberry Group 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 Infineon Technologies and Mulberry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infineon Technologies AG and Mulberry Group PLC, you can compare the effects of market volatilities on Infineon Technologies and Mulberry Group 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 Infineon Technologies with a short position of Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Mulberry Group.

Diversification Opportunities for Infineon Technologies and Mulberry Group

-0.4

Correlation Coefficient

Infineon Technologies  Mulberry Group

Very good diversification

The 3 months correlation between Infineon and Mulberry is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC and Infineon Technologies 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 Infineon Technologies AG are associated (or correlated) with Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Mulberry Group go up and down completely randomly.

Pair Corralation between Infineon Technologies and Mulberry Group

Assuming the 90 days trading horizon Infineon Technologies AG is expected to generate 1.32 times more return on investment than Mulberry Group. However, Infineon Technologies is 1.32 times more volatile than Mulberry Group PLC. It trades about 0.07 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.13 per unit of risk. If you would invest  3,151  in Infineon Technologies AG on December 25, 2024 and sell it today you would earn a total of  304.00  from holding Infineon Technologies AG or generate 9.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Infineon Technologies AG  vs.  Mulberry Group PLC

Infineon Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Infineon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mulberry Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mulberry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Infineon Technologies and Mulberry Group

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

The idea behind Infineon Technologies AG and Mulberry Group PLC 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.