Correlation Between East Side and Infinico Metals

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

By analyzing existing cross correlation between East Side Games and Infinico Metals Corp, you can compare the effects of market volatilities on East Side and Infinico Metals 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 East Side with a short position of Infinico Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and Infinico Metals.

Diversification Opportunities for East Side and Infinico Metals

0.74

Correlation Coefficient

East Side  Infinico Metals

Poor diversification

The 3 months correlation between East and Infinico is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp and East Side 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 East Side Games are associated (or correlated) with Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of East Side i.e., East Side and Infinico Metals go up and down completely randomly.

Pair Corralation between East Side and Infinico Metals

Assuming the 90 days trading horizon East Side Games is expected to generate 0.25 times more return on investment than Infinico Metals. However, East Side Games is 4.0 times less risky than Infinico Metals. It trades about -0.02 of its potential returns per unit of risk. Infinico Metals Corp is currently generating about -0.09 per unit of risk. If you would invest  62.00  in East Side Games on October 4, 2024 and sell it today you would lose (2.00) from holding East Side Games or give up 3.23% of portfolio value over 90 days.

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

East Side Games  vs.  Infinico Metals Corp

East Side Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with East Side and Infinico Metals

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

The idea behind East Side Games and Infinico Metals Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.