Correlation Between Converge Technology and Internet Infinity

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

By analyzing existing cross correlation between Converge Technology Solutions and Internet Infinity, you can compare the effects of market volatilities on Converge Technology and Internet Infinity 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 Converge Technology with a short position of Internet Infinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Internet Infinity.

Diversification Opportunities for Converge Technology and Internet Infinity

0.91

Correlation Coefficient

Converge Technology  Internet Infinity

Almost no diversification

The 3 months correlation between Converge and Internet is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Internet Infinity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Infinity and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Internet Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Infinity has no effect on the direction of Converge Technology i.e., Converge Technology and Internet Infinity go up and down completely randomly.

Pair Corralation between Converge Technology and Internet Infinity

Assuming the 90 days horizon Converge Technology Solutions is expected to generate 0.85 times more return on investment than Internet Infinity. However, Converge Technology Solutions is 1.18 times less risky than Internet Infinity. It trades about -0.08 of its potential returns per unit of risk. Internet Infinity is currently generating about -0.09 per unit of risk. If you would invest  331.00  in Converge Technology Solutions on October 7, 2024 and sell it today you would lose (77.00) from holding Converge Technology Solutions or give up 23.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.92%
Values	Daily Returns

Converge Technology Solutions  vs.  Internet Infinity

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Internet Infinity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Internet Infinity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Converge Technology and Internet Infinity

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

The idea behind Converge Technology Solutions and Internet Infinity 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.