Correlation Between Aware and Infobird

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

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

Diversification Opportunities for Aware and Infobird

-0.31

Correlation Coefficient

Aware  Infobird

Very good diversification

The 3 months correlation between Aware and Infobird is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aware Inc and Infobird Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infobird and Aware 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 Aware Inc are associated (or correlated) with Infobird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infobird has no effect on the direction of Aware i.e., Aware and Infobird go up and down completely randomly.

Pair Corralation between Aware and Infobird

Given the investment horizon of 90 days Aware Inc is expected to under-perform the Infobird. But the stock apears to be less risky and, when comparing its historical volatility, Aware Inc is 2.05 times less risky than Infobird. The stock trades about -0.05 of its potential returns per unit of risk. The Infobird Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  225.00  in Infobird Co on September 28, 2024 and sell it today you would earn a total of  24.00  from holding Infobird Co or generate 10.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aware Inc  vs.  Infobird Co

Aware Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Infobird

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Infobird Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Infobird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aware and Infobird

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

The idea behind Aware Inc and Infobird 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.