Correlation Between AKKO Invest and Infineon Technologies

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

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

Diversification Opportunities for AKKO Invest and Infineon Technologies

-0.08

Correlation Coefficient

AKKO Invest  Infineon Technologies

Good diversification

The 3 months correlation between AKKO and Infineon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AKKO Invest Nyrt and Infineon Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infineon Technologies and AKKO Invest 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 AKKO Invest Nyrt are associated (or correlated) with Infineon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infineon Technologies has no effect on the direction of AKKO Invest i.e., AKKO Invest and Infineon Technologies go up and down completely randomly.

Pair Corralation between AKKO Invest and Infineon Technologies

Assuming the 90 days trading horizon AKKO Invest is expected to generate 1.67 times less return on investment than Infineon Technologies. But when comparing it to its historical volatility, AKKO Invest Nyrt is 1.74 times less risky than Infineon Technologies. It trades about 0.14 of its potential returns per unit of risk. Infineon Technologies AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,145,000  in Infineon Technologies AG on September 14, 2024 and sell it today you would earn a total of  228,000  from holding Infineon Technologies AG or generate 19.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.49%
Values	Daily Returns

AKKO Invest Nyrt  vs.  Infineon Technologies AG

AKKO Invest Nyrt

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AKKO Invest Nyrt are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AKKO Invest unveiled solid returns over the last few months and may actually be approaching a breakup point.

Infineon Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Infineon Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AKKO Invest and Infineon Technologies

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

The idea behind AKKO Invest Nyrt and Infineon Technologies AG 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 Transaction History module to view history of all your transactions and understand their impact on performance.