Correlation Between Financial and Infinico Metals

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

By analyzing existing cross correlation between Financial 15 Split and Infinico Metals Corp, you can compare the effects of market volatilities on Financial 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 Financial with a short position of Infinico Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Infinico Metals.

Diversification Opportunities for Financial and Infinico Metals

-0.78

Correlation Coefficient

Financial  Infinico Metals

Pay attention - limited upside

The 3 months correlation between Financial and Infinico is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split 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 Financial 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 Financial 15 Split 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 Financial i.e., Financial and Infinico Metals go up and down completely randomly.

Pair Corralation between Financial and Infinico Metals

Assuming the 90 days trading horizon Financial is expected to generate 5.37 times less return on investment than Infinico Metals. But when comparing it to its historical volatility, Financial 15 Split is 63.55 times less risky than Infinico Metals. It trades about 0.42 of its potential returns per unit of risk. Infinico Metals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Infinico Metals Corp on November 29, 2024 and sell it today you would lose (1.00) from holding Infinico Metals Corp or give up 40.0% of portfolio value over 90 days.

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

Financial 15 Split  vs.  Infinico Metals Corp

Financial 15 Split

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Financial may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Infinico Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infinico Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Infinico Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Financial and Infinico Metals

The main advantage of trading using opposite Financial and Infinico Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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 Financial 15 Split 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.