Correlation Between Infineon Technologies and MOL Nyrt

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

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

Diversification Opportunities for Infineon Technologies and MOL Nyrt

0.35

Correlation Coefficient

Infineon Technologies  MOL Nyrt

Weak diversification

The 3 months correlation between Infineon and MOL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Infineon Technologies 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 Infineon Technologies AG are associated (or correlated) with MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and MOL Nyrt go up and down completely randomly.

Pair Corralation between Infineon Technologies and MOL Nyrt

Assuming the 90 days trading horizon Infineon Technologies is expected to generate 13.23 times less return on investment than MOL Nyrt. In addition to that, Infineon Technologies is 2.92 times more volatile than MOL Nyrt. It trades about 0.0 of its total potential returns per unit of risk. MOL Nyrt is currently generating about 0.12 per unit of volatility. If you would invest  273,000  in MOL Nyrt on December 30, 2024 and sell it today you would earn a total of  23,000  from holding MOL Nyrt or generate 8.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.56%
Values	Daily Returns

Infineon Technologies AG  vs.  MOL Nyrt

Infineon Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infineon Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Infineon Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

MOL Nyrt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Nyrt are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, MOL Nyrt may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Infineon Technologies and MOL Nyrt

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

The idea behind Infineon Technologies AG and MOL Nyrt 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..