Correlation Between Infotel SA and Keyrus SA

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

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

Diversification Opportunities for Infotel SA and Keyrus SA

0.25

Correlation Coefficient

Infotel SA  Keyrus SA

Modest diversification

The 3 months correlation between Infotel and Keyrus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Infotel SA and Keyrus SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyrus SA and Infotel SA 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 Infotel SA are associated (or correlated) with Keyrus SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyrus SA has no effect on the direction of Infotel SA i.e., Infotel SA and Keyrus SA go up and down completely randomly.

Pair Corralation between Infotel SA and Keyrus SA

Assuming the 90 days trading horizon Infotel SA is expected to generate 2.29 times more return on investment than Keyrus SA. However, Infotel SA is 2.29 times more volatile than Keyrus SA. It trades about 0.03 of its potential returns per unit of risk. Keyrus SA is currently generating about -0.06 per unit of risk. If you would invest  4,320  in Infotel SA on December 31, 2024 and sell it today you would earn a total of  90.00  from holding Infotel SA or generate 2.08% return on investment over 90 days.

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

Infotel SA  vs.  Keyrus SA

Infotel SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infotel SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Infotel SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Keyrus SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyrus SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Keyrus SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Infotel SA and Keyrus SA

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

The idea behind Infotel SA and Keyrus SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.