Correlation Between Advanced Info and Infraset Public

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

By analyzing existing cross correlation between Advanced Info Service and Infraset Public, you can compare the effects of market volatilities on Advanced Info and Infraset Public 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 Advanced Info with a short position of Infraset Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Infraset Public.

Diversification Opportunities for Advanced Info and Infraset Public

0.21

Correlation Coefficient

Advanced Info  Infraset Public

Modest diversification

The 3 months correlation between Advanced and Infraset is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Infraset Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infraset Public and Advanced Info 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 Advanced Info Service are associated (or correlated) with Infraset Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infraset Public has no effect on the direction of Advanced Info i.e., Advanced Info and Infraset Public go up and down completely randomly.

Pair Corralation between Advanced Info and Infraset Public

Assuming the 90 days trading horizon Advanced Info is expected to generate 25.27 times less return on investment than Infraset Public. But when comparing it to its historical volatility, Advanced Info Service is 47.75 times less risky than Infraset Public. It trades about 0.12 of its potential returns per unit of risk. Infraset Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  257.00  in Infraset Public on October 22, 2024 and sell it today you would earn a total of  25.00  from holding Infraset Public or generate 9.73% return on investment over 90 days.

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

Advanced Info Service  vs.  Infraset Public

Advanced Info Service

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Advanced Info is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Infraset Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infraset Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Infraset Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advanced Info and Infraset Public

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

The idea behind Advanced Info Service and Infraset 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.