Correlation Between Infinity Capital and TRANSILVANIA INVESTMENTS

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

By analyzing existing cross correlation between Infinity Capital Investments and TRANSILVANIA INVESTMENTS ALLIANCE, you can compare the effects of market volatilities on Infinity Capital and TRANSILVANIA INVESTMENTS 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 Infinity Capital with a short position of TRANSILVANIA INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Capital and TRANSILVANIA INVESTMENTS.

Diversification Opportunities for Infinity Capital and TRANSILVANIA INVESTMENTS

0.57

Correlation Coefficient

Infinity Capital  TRANSILVANIA INVESTMENTS

Very weak diversification

The 3 months correlation between Infinity and TRANSILVANIA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Capital Investments and TRANSILVANIA INVESTMENTS ALLIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA INVESTMENTS and Infinity Capital 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 Infinity Capital Investments are associated (or correlated) with TRANSILVANIA INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA INVESTMENTS has no effect on the direction of Infinity Capital i.e., Infinity Capital and TRANSILVANIA INVESTMENTS go up and down completely randomly.

Pair Corralation between Infinity Capital and TRANSILVANIA INVESTMENTS

Assuming the 90 days trading horizon Infinity Capital Investments is expected to generate 0.71 times more return on investment than TRANSILVANIA INVESTMENTS. However, Infinity Capital Investments is 1.4 times less risky than TRANSILVANIA INVESTMENTS. It trades about 0.09 of its potential returns per unit of risk. TRANSILVANIA INVESTMENTS ALLIANCE is currently generating about 0.06 per unit of risk. If you would invest  170.00  in Infinity Capital Investments on September 12, 2024 and sell it today you would earn a total of  70.00  from holding Infinity Capital Investments or generate 41.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.43%
Values	Daily Returns

Infinity Capital Investments  vs.  TRANSILVANIA INVESTMENTS ALLIA

Infinity Capital Inv

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infinity Capital Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Infinity Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TRANSILVANIA INVESTMENTS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRANSILVANIA INVESTMENTS ALLIANCE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, TRANSILVANIA INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Infinity Capital and TRANSILVANIA INVESTMENTS

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

The idea behind Infinity Capital Investments and TRANSILVANIA INVESTMENTS ALLIANCE 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.