Correlation Between Daxor and InfuSystems Holdings

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

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

Diversification Opportunities for Daxor and InfuSystems Holdings

0.72

Correlation Coefficient

Daxor  InfuSystems Holdings

Poor diversification

The 3 months correlation between Daxor and InfuSystems is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Daxor and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and Daxor 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 Daxor are associated (or correlated) with InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of Daxor i.e., Daxor and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between Daxor and InfuSystems Holdings

Considering the 90-day investment horizon Daxor is expected to generate 0.72 times more return on investment than InfuSystems Holdings. However, Daxor is 1.39 times less risky than InfuSystems Holdings. It trades about -0.09 of its potential returns per unit of risk. InfuSystems Holdings is currently generating about -0.07 per unit of risk. If you would invest  813.00  in Daxor on November 29, 2024 and sell it today you would lose (39.00) from holding Daxor or give up 4.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Daxor  vs.  InfuSystems Holdings

Daxor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Daxor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

InfuSystems Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Daxor and InfuSystems Holdings

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

The idea behind Daxor and InfuSystems Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.