Correlation Between Carlo Gavazzi and Inficon Holding

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

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

Diversification Opportunities for Carlo Gavazzi and Inficon Holding

-0.19

Correlation Coefficient

Carlo Gavazzi  Inficon Holding

Good diversification

The 3 months correlation between Carlo and Inficon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Carlo Gavazzi Holding and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon Holding and Carlo Gavazzi 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 Carlo Gavazzi Holding are associated (or correlated) with Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of Carlo Gavazzi i.e., Carlo Gavazzi and Inficon Holding go up and down completely randomly.

Pair Corralation between Carlo Gavazzi and Inficon Holding

Assuming the 90 days trading horizon Carlo Gavazzi Holding is expected to generate 1.03 times more return on investment than Inficon Holding. However, Carlo Gavazzi is 1.03 times more volatile than Inficon Holding. It trades about 0.07 of its potential returns per unit of risk. Inficon Holding is currently generating about -0.05 per unit of risk. If you would invest  18,350  in Carlo Gavazzi Holding on December 30, 2024 and sell it today you would earn a total of  1,500  from holding Carlo Gavazzi Holding or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Carlo Gavazzi Holding  vs.  Inficon Holding

Carlo Gavazzi Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlo Gavazzi Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Carlo Gavazzi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Inficon Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inficon Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Carlo Gavazzi and Inficon Holding

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

The idea behind Carlo Gavazzi Holding and Inficon Holding 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.