Correlation Between Infineon Technologies and Raba Jarmuipari

Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Raba Jarmuipari 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 Raba Jarmuipari 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 Raba Jarmuipari Holding, you can compare the effects of market volatilities on Infineon Technologies and Raba Jarmuipari 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 Raba Jarmuipari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Raba Jarmuipari.

Diversification Opportunities for Infineon Technologies and Raba Jarmuipari

0.7

Correlation Coefficient

Infineon Technologies  Raba Jarmuipari

Poor diversification

The 3 months correlation between Infineon and Raba is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Raba Jarmuipari Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raba Jarmuipari Holding 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 Raba Jarmuipari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raba Jarmuipari Holding has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Raba Jarmuipari go up and down completely randomly.

Pair Corralation between Infineon Technologies and Raba Jarmuipari

Assuming the 90 days trading horizon Infineon Technologies is expected to generate 1.38 times less return on investment than Raba Jarmuipari. In addition to that, Infineon Technologies is 1.04 times more volatile than Raba Jarmuipari Holding. It trades about 0.08 of its total potential returns per unit of risk. Raba Jarmuipari Holding is currently generating about 0.12 per unit of volatility. If you would invest  129,500  in Raba Jarmuipari Holding on December 4, 2024 and sell it today you would earn a total of  25,500  from holding Raba Jarmuipari Holding or generate 19.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	70.69%
Values	Daily Returns

Infineon Technologies AG  vs.  Raba Jarmuipari Holding

Infineon Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Infineon Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Raba Jarmuipari Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raba Jarmuipari Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raba Jarmuipari unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infineon Technologies and Raba Jarmuipari

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

The idea behind Infineon Technologies AG and Raba Jarmuipari 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.