Correlation Between Infinico Metals and Stella Jones

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

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

Diversification Opportunities for Infinico Metals and Stella Jones

0.06

Correlation Coefficient

Infinico Metals  Stella Jones

Significant diversification

The 3 months correlation between Infinico and Stella is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of Infinico Metals i.e., Infinico Metals and Stella Jones go up and down completely randomly.

Pair Corralation between Infinico Metals and Stella Jones

Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 9.21 times more return on investment than Stella Jones. However, Infinico Metals is 9.21 times more volatile than Stella Jones. It trades about 0.12 of its potential returns per unit of risk. Stella Jones is currently generating about -0.02 per unit of risk. If you would invest  1.00  in Infinico Metals Corp on December 30, 2024 and sell it today you would earn a total of  0.50  from holding Infinico Metals Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Infinico Metals Corp  vs.  Stella Jones

Infinico Metals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infinico Metals Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Infinico Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Stella Jones

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stella Jones has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Stella Jones is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Infinico Metals and Stella Jones

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

The idea behind Infinico Metals Corp and Stella Jones 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.